Cherished oil myths ... OPEC over-capacity!

VHeadline.com

In the last 12 months, world oil import demand increased by well over 3 million barrels/day, while consumption increased by a mere 2.6 mbd. Three years of growth of the 2004 vintage, with oil prices up to US$55/barrel, will need one new Saudi Arabia or two new Russias.

Where exactly these will come from isn't spelled out by analysts and traders itching to mark down prices when the post-winter glut happens ... but it surely won't be easy or cheap.

The myth of OPEC over-capacity is only dying slowly ... but near the end will accelerate very fast: perhaps this year, and certainly by 2007 or 2008 it will have disappeared.

The Beginning of the Oil End Game

From The Wilderness

Three key facts are of overriding importance to world events today.

FACT ONE - If the actions - rather than the words - of the oil business' major players provide the best gauge of how they see the future, then ponder the following. Crude oil prices have doubled since 2001, but oil companies have increased their budgets for exploring new oil fields by only a small fraction. Likewise, U.S. refineries are working close to capacity, yet no new refinery has been constructed since 1976. And oil tankers are fully booked, but outdated ships are being decommissioned faster than new ones are being built.
- Mark Williams, Technology Review, February 2005

LONDON -- Major oil companies are replacing dwindling reserves by acquiring other oil companies instead of exploring for new fields, a strategic shift with implications for global oil supplies, investment bank Credit Suisse First Boston said in a report Monday.

Integrated oil companies are spending only 12% of their total capital expenditures on finding new oil fields, down from nearly a third in 1990, the report said. Integrated oil companies like U.S. super-major ExxonMobil Corp (XOM) have upstream oil exploration and pumping and downstream refining and marketing operations.
In addition, with the world's biggest oil companies convinced exploration is too costly and risky, the steady growth of the world's total oil reserves has fallen sharply, the bank said. Global oil reserves are being replaced at a rate of 1.2% a year in the last three years, compared to 2.3% over the last 20 years, even as oil demand growth is hitting new records with China and India becoming industrial powers, the bank said.
-- Dow Jones Newswire, January 17, 2005

FACT TWO - Let's forget about economic growth, how about just offsetting declines. If Mr. Raymond's curve reflects reality we would still have to find about 30 Gb/yr. How are we doing?
From http://www.ems.org/rls/2004/01/28/oil_supply_short.html we find the following:
The rate of major new oil field discoveries has fallen dramatically in recent years. [Global discovery peaked in the 1960s. Per capita energy production peaked in 1979. -Ed] There were 13 discoveries of over 500 million barrels in 2000, six in 2001 and just two in 2002, according to the industry analysts IHS Energy. For 2003, not a single new discovery over 500 million barrels has been reported. Key findings of a recent Petroleum Review report are:
Between 2003 and early 2007 some 8 million barrels/day of new capacity is expected to come on stream.

In 2005, 18 projects with a potential peak capacity of 3 million barrels a day are due to come on stream, slowing in 2006 with 11 new projects followed by 3 in 2007, and 3 in 2008 adding a cumulative 4 million barrels/day of potential new capacity at their peak.

It appears likely that from 2007, the volumes of new production will fall short of the need to replace lost capacity from depleting older fields.

Further confirming this trend, recent E&D results strongly support the expectation of a near term peak in oil production. The net present value of all discoveries for the 5 oil majors during 2001/2/3 was less than their exploration costs.
-- Murray Duffin, Energy Pulse, November 17, 2004

(These calculations were confirmed by the Oil Depletion Analysis Centre of the UK in November 2004 and by FTW's Dale Allen Pfeiffer's independent calculations in February of 2004. There was not a single discovery of a 500 Mb field in 2003 and - as far as we know (as of this writing) the same holds true for 2004. The world is currently consuming a billion barrels of oil every eleven and one half days.)

Fact Three -- Look at this imbalance: The average American consumes 25 barrels of oil a year. In China, the average is about 1.3 barrels per year; in India, less than one…

The challenge is huge. For China and India to reach just one-quarter of the level of US oil consumption, world output would have to rise by 44 percent. To get to half the US level, world production would need to nearly double. That's impossible. The world's oil reserves are finite. And the view is spreading that global oil output will soon peak.
-- The Christian Science Monitor, January 20, 2005

These three facts alone dictate a global mêlée over oil and that is in fact what is happening. It seems clear now that the world's major oil consuming nations have decided to position themselves to control as much oil as possible before the now certain 2007 cliff event. The first fact underscores a point FTW has been making for years now. Even if Peak Oil was some fabrication (hard to believe at this point), the world is behaving as though it were quite real and imminent. The fact that there is virtually no exploration or refinery construction means that the majors understand clearly that there is no more significant oil to find and their investments would never be paid off.

As the following maps disclose, events in just the last year reveal the building frenzy behind these conflicts which are threatening to escalate to military conflict soon. Sometimes a picture is worth more than a thousand words.

The consequences of growing oil hunger

International Relations and Security Network ISN - Security Watch

With demand for oil soaring and reserves dipping, some say prices will continue to rise, along with the possibility of new conflicts.

Saudi Arabia holds one-quarter of the world’s proven oil reserves - some 260 billion barrels. But even here there are signs of field depletion. No major fields have been discovered since 1970. Aquifers are being drained to pump oil out from deeper and deeper in the ground, a sign the easier and cheaper to drill oil near the surface is gone or going. The Saudis’ and the world’s biggest oil field, Ghawar - a 500-kilometer-long sliver of land near the Persian Gulf - is not as robust as it once was. Mathew Simmons, an energy investment banker and one-time adviser to US President George Bush, said no one really knows how much oil the Saudis have. The state-owned oil company, Saudi Aramco, has not provided production data for more than two decades. But Simmons noted that the Saudis have been talking about the risk of depleting their own reserves since the 1970s. "What I find interesting is that there clearly has been a running debate going on within the ranks of Aramco going all the way back to the 1970s when Saudi Arabia had the market opportunity, or, you could argue, was forced into opening its valves faster and faster to keep global markets supplied," Simmons said. "And by 1974, when their oil production had grown from under three to over eight million barrels a day in a four year period of time, there were already debates going on within Aramco as to whether they were already overproducing these fields." On the record, Saudi Aramco officials confidently speak of increasing production in the future. But many analysts said they were not so sure. They belong to the "peak" oil movement that believes the world has already used up half of all existing oil. After this "peak," these analysts say oil supplies will start to drop, prices will rise, and then risk of conflicts over resources will grow.

Bullish oilmen
Bullish oilmen, however, still enthusiastically point to possible new discoveries in places as far-flung as Colombia and Sudan. Or the Caspian region, which has long been cited as a potential paradise of oil riches. In 1997, the US State Department put the possible value of Caspian Sea oil at an incredible US$4 trillion. One field, Kashagan in Kazakhstan, was thought to be particularly bountiful. But as Simmons explained, Kashagan - and Caspian oil - might have been more hype than reality. "Now, there’s an enormous project that got sanctioned to begin development spending in the middle of 2004 called Kashagan that is being billed by some people as the biggest oil field found in the last 30 years," Simmons said. "Interestingly enough, three of its original partners who held collectively 30 per cent have already bailed out." Even oilmen admit that Caspian Sea prospects were probably overblown, although reserves there are still significant. But new discoveries often do not have a major impact on world oil supply. "Fifty per cent of all the oil we are using today is just from something like 150 oil fields, and there is something like 40’000 [oil fields] in the world," said Kjell Aleklett, president of the Association for the Study of Peak Oil and Gas and a professor at Sweden’s Upsalla University. But if discoveries are down and supplies dipping, demand is up. Driving it is population growth led by China with 1.3 billion people.

World oil hunger
Buoyed by an economic boom, China has overtaken Japan as the world’s second oil-consuming country after the US. The US Department of Energy predicts that through 2020, energy consumption in China will rise about 4.3 per cent a year, and by at least 3 per cent in three other large developing countries: India, Brazil, and Mexico. Aleklett and other peak oil analysts warn that meeting future demand without seriously drawing down reserves is impossible. Aleklett said China is aware that oil will be scarcer in the future and is scrambling to buy up or contract for as much oil as it can - even negotiating with Canada, America’s top energy supplier. Possible Sino-American jousting for Canadian oil could be just a glimpse of what might be a more fierce global competition to come for black gold. Michael T. Klare, author of "Resources Wars", noted that the biggest oil supplies were found in some of the most volatile regions: the Middle East, Caucasus, and Central Asia. He said major world powers would not be drawn into direct conflict there but they would not sit on the sidelines, either. "But rather, proxy conflicts where all these countries get involved in local disputes within Kazakhstan, within Georgia, Azerbaijan, these other countries; one side favoring one party to a dispute, the other side favoring the other side to a dispute," Klare said. "So you get these big powers getting involved in local conflicts and escalating into something larger." Klare highlighted the Caspian region. The five states that share its shores - Kazakhstan, Russia, Iran, Azerbaijan, and Turkmenistan - have been haggling for years now on how to divide the sea and divvy up its riches. As oil and gas become more precious, Klare said, that competition could become more intense and less compromising. Aleklett and other peak oil analysts have argued that the West must curb its hunger for oil now to avoid problems later. He pointed out that the US has 5 per cent of the world’s population but uses 25 per cent of its resources. The father of the peak oil movement, the American geologist M. King Hubbert, said that an economic model based of infinite growth but fueled by finite natural resources is doomed. Ironically, there’s also a saying from oil-rich Saudi Arabia that goes: "My father rode a camel. I drive a car. My son flies a jet airplane. His son will ride a camel."

Economics and geology may add up to $10 a gallon gasoline

TheJounalNews.com

Drivers who think they're getting a raw deal at the gas pump these days may look back on the summer of 2004 with great nostalgia if a theory some experts hold proves to be true.

Proponents of the "peak oil" theory warn that the world is close to the day when producers are pulling as much of the commodity out of the ground as supply, geology, economics and drilling technology allow.

They say the dwindling of the precious supply, coupled with the world's growing demand, will send prices soaring, threatening a way of life in an America hooked on sport utility vehicles, big houses and a plentiful, cheap food supply.

Sick of paying $2 or more for a gallon of regular unleaded? Try $7 to $10. That's the range some who espouse the theory predict if production peaks by the end of the decade.

And those are the optimists.

Peak oil adherents with an even darker view say the world is on the cusp of a global recession, widespread famine and constant warfare between nations desperate to secure what's left. Human extinction is a possibility, the most pessimistic believers say.

Not everyone who has studied the world oil supply believes production is about to peak. Researchers at the U.S. Energy Information Administration say they believe production will not peak until 2037, while other analysts point out that previous predictions of a peak date proved to be wrong.

Those who believe that depletion is imminent are sometimes derided as Chicken Little-like eccentrics, as they tell governments, the media, the energy industry and just about anyone else willing to listen that the world is on the front edge of an emergency.

One of the worriers is David Goodstein, a physics professor at the California Institute of Technology. In his book, "Out of Gas: The End of the Age of Oil," Goodstein writes that once production peaks, people will have to switch to alternative fuels in time to meet rising energy demand. Otherwise, "runaway inflation and worldwide depression" will force billions of people to burn coal, he says.

The so-called "greenhouse effect" — the rise in temperature caused by gases trapping energy from the sun — could make the planet unlivable, Goodstein says.

"End of story," is Goodstein's somber conclusion. "In this instance, worst case really means worst case."

Goodstein acknowledges that though it's impossible to predict all the effects, "We can all too easily envision a dying civilization, the landscape littered with the rusting hulks of useless SUVs."

But doomsday is avoidable, says Goodstein, who believes that the peak may hit this decade. Methane could fuel the world economy temporarily until more nuclear plants are built and the infrastructure for producing and using other energy sources is in place, he says.

Goodstein writes that if the human race gets over the shock of no more cheap oil and switches to coal and natural gas, life could continue without big disruptions. But by the end of the 21st century, the world will begin to run out of all fossil fuels under this scenario, he says.

"We may well have rendered the planet unfit for human life," he says. "Even if human life does go on, civilization as we know it will not survive, unless we can find a way to live without fossil fuels."

In an interview, Goodstein indicated that he tries to do his part. He drives a hybrid car, which runs on a combination of gasoline and electricity, and lives close enough to his job that he can walk some days. But he realizes his contribution is small.

"What I do doesn't make very much difference," he says. "I don't use 20 million barrels of oil a day."

Richard Heinberg, a professor of human ecology at New College of California and author of a book called "The Party's Over: Oil, War, and the Fate of Industrial Societies," also has no illusions about his ability to make a difference.

But Heinberg, who expects peak production in 2007 or 2008 and $5-a-gallon gasoline by the end of the decade, shows his conviction with his lifestyle. He tools around in a 1980 Mercedes that runs on modified vegetable oil — or "biodiesel" — and lives in a house that gets its electricity from the solar panels he installed for $10,000 three years ago.

Heinberg, who also wrote a book called "Powerdown: Options and Actions for a Post-Carbon World," is a member of a co-op at his school that buys the biodiesel in bulk.

Peak inevitable

Nobody disagrees that production eventually will peak, because the amount of oil in the Earth is finite. It also is clear that population increases and rapid economic growth, particularly in the United States, the world's wealthiest nation, and China, the world's most-populus nation, will continue to drive up demand.

The father of the theory is Marion King Hubbert, a Shell Oil Co. geologist who predicted in 1956 that American oil production would peak between 1966 and 1971. Skeptics questioned Hubbert's projection, but U.S. crude oil production reached 9.64 million barrels a day in 1970 and by last year had dropped to 5.74 million barrels, according to the EIA.

The world produced 69.3 million barrels of crude oil a day last year, the largest total on record. The United States was the largest consumer of petroleum, using 20.04 million barrels a day.

The potential effects of a serious shortage go far beyond stress at the gas pumps. Nearly everything we eat or use was made or transported with a fuel made from petroleum. The fuels power factories, farm equipment and ships. They heat homes and businesses. Fertilizers and insecticides are made from oil.

Oil is used to make most organic chemicals — or petrochemicals — including pharmaceuticals, agricultural products, plastics and fabrics.

High oil prices drive up the prices of goods and services and eat up the money people would rather spend on food, clothes, vacations, houses and other pleasures and necessities. That hurts those businesses and their employees. Every recession since the early 1970s was preceded by a sharp rise in oil prices.

Some researchers who have studied oil supplies believe that the peak in world production is decades, not years, in the future. They point to numerous variables, such as the development of alternative sources of energy, the possibility of finding new fields and the emergence of technologies that could make it economical for producers to pull more oil out of a field than they do now.

They also point to the possibility of new conservation strategies, such as hybrid cars like the Honda Civic Hybrid and the Toyota Prius.

Myriad geopolitical, economic and other factors — such as a large terror strike on oil infrastructure — could affect the supply, making predictions dicey, some say.

Higher oil prices also could trigger energy-saving cultural shifts leading to more use of public transportation, a migration from the suburbs into cities as people look to shorten their drive to work or a boomlet in sales of small cars like what occurred after the Arab oil embargo of 1973.

Any one of these trends would delay the peak.

A.F.ûAlhajji, an associate professor of economics in the College of Business Administration at Ohio Northern University in Ada, Ohio, says the first predictions that the world was about to run out of oil surfaced in the 1890s, less than 40 years after the first oil well was drilled in northwestern Pennsylvania.

"A hundred of years of wrong predictions," says Alhajji, who believes predicting a precise peak date is nearly impossible. "What kind of science is that?"

The peak theory does not appear to have gotten through to those in the boardrooms of some of the world's largest oil companies. Research into renewable sources of energy such as the sun, wind and water might yield results years from now, but shareholders aren't usually a patient lot.

Lord Browne, group chief executive at BP PLC, reported in a June speech in Washington, D.C., that his company is researching photovoltaics — the technology that produces electricity directly from sunlight. But he says it may be at least 20 years before the world can rely on so-called renewable sources of energy, such as the sun, wind and water for significant amounts of energy.

That means relying on oil, gas and coal, he says.

"Can the oil and gas industry meet that demand?" he says. "In physical terms, the answer is clearly yes. The physical resources are there."

Exxon Mobil Corp. says in a February report that it is eschewing research into renewable sources such as wind and solar because they are not sound short-term investments. The company is researching technologies that would make it easier to find reservoirs of fuel, hydrogen production for use in fuel cells to power cars and more-efficient engines.

Though officials in the federal government believe production will hit a peak, they are more optimistic about the timing than some other experts.

At the U.S. Energy Information Administration, three analysts examined about a dozen different possible scenarios in concluding that production is most likely to peak in 2037.

David Morehouse, an EIA geologist and one of the authors, says the estimate is based on the premise that the Earth contains 3 trillion barrels of recoverable oil, the amount estimated by the U.S. Geological Survey.

"Many modelers who say it's sooner have convinced themselves that the resources base is smaller than many of us think," he says.

The geological service estimates are "the most complete and thorough estimate for world oil," ever compiled, he says.

The authors' estimate also assumes crude oil production will increase about 2 percent a year, Morehouse says.

He says their conclusion covers only oil in conventional oil reservoirs. It does not include so-called "heavy oil" or tar sands that are plentiful in parts of Canada and Venezuela. Tar sands can be processed into petroleum products and, if exploited, could add a couple of decades to the peak date, Morehouse says.

But he acknowledges that tar sands are difficult to get out of the ground. The tar sands in Venezuela flow slowly, while those in Canada require steam injection to flow, he says.

Despite taking a rosier view than some, Morehouse and his fellow authors urge the world to pay attention to the phenomenon.

"This result in no way justifies complacency about both supply-side and demand-side research and development," they conclude.

President Bush and his Democratic opponent, Sen. John F. Kerry, both preach the need for the United States to be less dependent on foreign oil, but they differ on strategy.

Bush boasts of having increased research into making electricity more reliable and of filling the Strategic Petroleum Reserves to their capacity of 700 million barrels that can be tapped in an emergency. The president wants to drill in the Arctic National Wildlife Refuge, burn more coal and speed up the permitting of exploration on federal and tribal lands.

Kerry emphasizes research into new energy sources and pushes $10 billion in incentives to encourage automakers to make fuel-efficient cars. He also advocates a $4,000 tax credit for people who buy those gas-stingy cars.

Urgency needed

Those who believe the peak is coming soon see a rising threat to the existence of the human race.

Matthew Simmons, who runs a Houston-based investment bank specializing in energy, says he believes that the world needs to curtail its oil production for several years while trying to get a better handle on what's left of the supply.

"It's very complicated, but the idea that it's not around the corner is really far-fetched in my opinion and it (peak production) may have already passed," says Simmons, who is writing a book about the depletion of Saudi Arabia's oil reservoirs.

Simmons says many of the world's largest oil fields, particularly those outside the former Soviet Union and the 11 nations that make up the Organization of the Petroleum Exporting Countries, no longer produce the volume they once did.

Though the yield from Russia and other parts of the former Soviet Union has increased in recent years, that growth has come because producers have squeezed old fields, not because they've discovered new fields, he says.

"It's really hard to find an area outside of OPEC that you could make you put your hand on your heart and say, 'I see a lot of growth coming in the next five years,' " he says. "Maybe we'll find a new basin somewhere, but we haven't done it in 30 years."

Simmons looks around the world and sees no other reasons for encouragement.

He says China has two fields, Daqing and Shengli, that account for 50 percent of that country's production. He says internal reports estimate production in these fields will drop by half in the next five years.

The bulk of Mexico's production comes from Cantarell Field, where it took a $10.5 billion nitrogen injection project to increase production.

The North Sea — between Great Britain and the European mainland — and Iran are other areas in decline, he says. Iraq's fields are being surveyed, but the nation's oil infrastructure was badly damaged by Saddam Hussein's neglect and war.

"There is a lot of potential for negative supply surprises," Simmons says. "There is very little potential for positive supply surprises."

It's a problem the world has been slow to recognize, and time is running out, he says.

"How do you solve it?" he says. "I don't know, but if you don't solve it, it's a show stopper. If you come back and think about the role of what modern energy plays in society, it's water, it's food, it's transportation. You really get into talking about much more than just motor gasoline prices."

2005: The Year of Global Oil Production Peak?

Scoop

By now anyone that listens to the news or reads a paper ought to know what Peak Oil means. The Green Party, primed by Jeanette Fitzsimons ''Picnic for the Planet Speech'' intends making it an election issue. This is sure to improve the Greens profile as the party of real intelligence if not of realpolitik, thus relegating ACT as they loll about in political wastelands hopelessly clinging to misguided ideologue that belongs in the 1990s – The National party ought to heed this herald to changing attitudes.

A doomsday for neo-classic economics approaches as the absurdity of supply side solutions (or lack thereof) to this approaching energy crisis “tsunami” become apparent. Aside from Malthusian demand destruction there simply are no supply side solutions. Oil has increased in price by about 350% since 1999 when it was around US$10bbl. The emerging crisis is completely unlike previous politically induced episodes of the 70s caused by embargoes and the Iranian crisis. This time mild mannered economists will come face to face with the stiletto point of geological depletion.

On the supply side we are seeing depletion rates increasing with North Sea oil and gas leading the way. On the demand side recent 20-something year peaks in oil price is only matched by the unprecedented demand as China, India, Turkey, Brazil and a swath of other nations race to industrialise. Car fleets throughout the EU nations, Australasia and Northern America continue to increase in number with larger capacity engines more popular.

Although the term “sustainable” means just about whatever you want it to mean these days one thing is certain: sustainable oil production is a fantasy only equated by the absurdity of the runaway consumption model. New Zealand’s so called “booming” economy, that is the out of control trade deficit, mortgage and credit creation spiralling out of control propped up by an inflated dollar and a consumer/housing bubble is almost certain to totter this year. Continuing oil supply concerns and the consequent per barrel increases will only contribute to monetary inflation. Further rising interest rates are sure to mangle domestic punters who are heavily geared on over-priced residential properties. The same consumers over-extended on their Visa gold cards will suffer miserably as oil-energy prices continue to rumble upwards seemingly out of control throughout the economy.

Everything from interest rates to the supermarket bill will go up. The denial, or continued false belief that this bullish market will sort itself out will be apparent as increasingly pointless suburban sprawl continues, millions on equally pointless roading is spent and ship loads of imported V8 4WD’s roll of the Wellington wharves to satisfy the ego’s of our economies obese consumers.

The first thing knowledge of peak oil ought to instruct us is to think about what the prospects are for a country that spends way more than it produces. The credit-card-fed/mortgage orgy will not be sustainable once the hand-brake of late 80s like interest rates bite as oil prices go through the canopy.

Andrew McKillop (Energy Economist) predicts global oil supply will fail to meet demand within 2-3 years. Colin Campbell and the ASPO (Association for Peak Oil) predicts peak year of 2007. Structural under-supply issues are almost certain to manifest themselves from about now onwards. Supply jitters will ensure continued price spikes moving upwards with occasional shorter downward trends. The Governments belief that oil will sometime move back toward US$20 per barrel will never be confirmed.

Kenneth Deffeyes and Jim Kunstler are amongst commentators predicting peak this year (2005). Jeanette Fitzsimons is predicting about 10 years from now. Contrastingly the International “don’t scare the horses” Energy Agency is predicting 2037 but this figure assumes we will discover an amount of oil in the order of 4 or more Saudi Arabias over the next decade or so. A laughable fantasy worthy of all contempt it deserves. Ironically an economic slump will buy some time.

This year is an election year in New Zealand. Each and every one of us ought to think about the maxim “buy an SUV! It’s great for the economy.” The days of munching on Quarter-Pounders and frys whilst driving between the Warehouse and suburbs in your Ford Explorer are drawing to a close. The traditional old political parties of New Zealand hiding behind their flawed economic ideologies are increasingly irrelevant, peak oil will usher in a new realpolitik a very new reality, one where “endless economic growth” is a but a sour memory of the good old days.

When Oil Peaks ...

Asia Times Online

Fertilizer, DVDs, rubber, cheap flights, plastics and metals. None of these things have anything in common, right? Think again. An ingredient in all of them, in one form or another, is oil.

Oil is the precious primer of the world economic engine, making it hum. Oil provides 40% of the world's energy needs, and nearly 90% of all transportation. It's also a building block for many products and goods. Cut supplies of this natural resource and life as we know it could change.

But while some experts say the world runs no risk of running out of oil, others disagree. Sounding the alarm is the Association for the Study of Peak Oil and Gas. Its president is Kjell Aleklett, a physics professor at Sweden's Upsalla University.

"[During] the next 30 years we will find more than 150, maybe 200, but probably not, but 150 billion barrels of oil is roughly what you're going to find," Aleklett said. "And during the same period, we will consume 1,000 [billion barrels of oil]. So that means we are now digging deep into the reserves we have at the moment."

Aleklett is among a group of international experts - ex-oil executives and geologists - who believe there is less oil percolating under the ground than the oil industry acknowledges. They say the world has burned up nearly half of all its oil - an estimated 900 billion barrels of crude.

In industry jargon, that halfway point is the "peak", after which reserves no longer rise but drop. No one denies this will happen eventually. After all, oil is a finite resource. But these oil skeptics - so-called "peak" oil analysts - say the "peak" is coming sooner rather than later, maybe even in 2008. They paint a gloomy picture: falling oil supplies plus rising demand will equal shortages - and perhaps a rising risk of war.

Mainstream experts, however, dismiss such talk as scaremongering. They say predictions about the end of petroleum have been made since shortly after the first commercial oil rig went up in western Pennsylvania back in 1859. The reality, they say, is that supplies are growing, with more oil coming out of Iraq, Russia, the Caspian Sea and elsewhere.

And if supplies dip and prices rise, these experts say that will spur the industry to explore for more. Plus, breakthroughs in technology will make it easier to extract oil hard to get at now, such as the petroleum locked in sands in Canada.

Michael Lynch, a critic of the peak oil movement, said the movement's guru, geologist Colin Campbell, has a long record of making inaccurate predictions. "The people who predict peak oil have been predicting it any day now for 15 years," Lynch said. "Like Colin Campbell said in '89 that this is the peak right now, in '91 he said the peak is next year, and in '95 he said it's in '97 and so forth. I've generally been predicting continued rise [in oil supplies] since I started working on this; really making forecasts in the late '80s. I think over the next 30 years you won't see a peak unless it's from the demand side."

But with oil breaking the US$50-a-barrel barrier in October, and amid other concerns, the peak oil crowd is grabbing more attention. One of their most startling claims is the following: six barrels of oil are now used for every new barrel discovered. Major oil finds - that is, more than 500 million barrels - peaked in 1964. In 2000, there were 13 such discoveries; in 2001, six; in 2002, two; and in 2003, zero - the first time that had ever happened.

The "peak" oil analysts also say oil-industry investment patterns seem to indicate that there isn't much oil left to discover.

Professor talks at exponential rate - Bartlett has given speech on growth 1,540 times

The Daily Camera: News

Albert Bartlett has given the same presentation 1,540 times.

That's the equivalent of once a day, every day, for more than four years. But the 81-year-old physics professor emeritus at the University of Colorado has spread things out a bit. He has been teaching his lesson on the power — and danger — of exponential growth since 1969.

This week, he's presenting "Arithmetic, Population and Energy" four times — twice at CU in Boulder, once at CU-Denver, and, on Friday, at California State University, Fresno. He expects to present it between 30 and 40 times this year, mostly at CU-Boulder.

He has been busier. In 1979, he gave the speech 132 times.

"That was too much," Bartlett said last week from his Boulder home.

In 1987, he gave it seven times in a single day, to high school students in Brush. At that pace, he could have knocked out all 1,540 in about seven months, including weekends.

These statistics — and many, many others — are in a book published last year. It's called "The Essential Exponential!: For the Future of Our Planet." Compiled by Bartlett devotees at the University of Nebraska at Lincoln, it is a compendium of journal articles by Bartlett and others with the same message: exponential growth of human population and natural-resource consumption can't happen forever.

It's all in the mathematics of compound growth. For investors, a constant 7 percent return doubles your capital in 10 years. But the same dynamic can be calamitous to the environment, Bartlett contends.

For example, a population of 10,000 growing at a constant 7 percent rate will hit 10 million a century later.

Robert Malthus, who in a 1798 essay predicted mass starvation because population growth was outstripping food production, was a major intellectual influence on Bartlett.

The agricultural revolution has only delayed the problem, Bartlett says. More people are starving today than ever, and per-capita global grain production has been falling since the 1980s, he said. Further, the engine of all this crop growth is petroleum-based fertilizer, and oil is a finite resource whose production peak could be happening now, Bartlett said. (More sanguine forecasters estimate global peak oil production in 2035.)

He likes to cite the late economist Kenneth Boulding's "Dismal Theorem," which says: "If the only ultimate check on growth of populations is misery, the population will grow until it is miserable enough to stop its growth."

Boulding, for the record, also had a "Moderately Cheerful Form of the Dismal Theorem," which says, if humanity can react to forces other than misery and starvation, we'll be just fine.

Bartlett believes such proactivity hinges on ending the widespread "innumeracy" — illiteracy with numbers — with respect to the hard truths of exponential growth.

He says capitalism can survive without population growth. The fertility rates in Italy and Spain have long been below replacement, he notes.

"It's not been a disaster," Bartlett said.

Bartlett rails against population growth, which, he says, "never pays for itself." He says building more reservoirs and highways doesn't solve problems, but rather invites even more growth and bigger hurdles down the road. Politicians lack the will to view population growth as something to be avoided and not invited, he says.

Bartlett has many fans and admirers, especially among scientists who appreciate a scientific message delivered in a memorable, blunt and funny way, said Larry Nation, communications director of the American Association of Petroleum Geologists, which hosted a Bartlett presentation at a convention in Dallas last year.

"He sat down in a chair and you felt like you were talking to your uncle, who by God is going to tell you how the cow eats cabbage," Nation said.

But doesn't Bartlett ever tire of saying the same thing — however interesting — over and over and over?

"I feel sort of like Billy Graham. I'm an evangelist. You've got to get it out to the people," Bartlett said. "I'll do it as long
as I can."

World: Oil (Part 1) -- 'Peak' Movement Argues Supplies Are Running Out

RADIO FREE EUROPE/ RADIO LIBERTY

Fertilizer, DVDs, rubber, cheap flights, plastics, and metals.

None of these things has anything in common, right? Think again. An ingredient in all, in one form or another, is oil.

Oil is the precious primer of the world economic engine, making it hum.

Oil provides 40 percent of the world's energy needs, and nearly 90 percent of all transportation. It's also a building block for many products and goods.

Cut supplies of this natural resource and life as we know it could change.

But while some experts say the world runs no risk of running out of oil, others disagree.

Sounding the alarm is the Association for the Study of Peak Oil and Gas. Its president is Kjell Aleklett, a physics professor at Sweden's Upsalla University.

"[During] the next 30 years we will find more than 150, maybe 200, but probably not, but 150 billion barrels of oil, is roughly what you're going to find," Aleklett said. "And during the same period, we will consume 1,000 [billion barrels of oil]. So that means we are now digging deep into the reserves we have at the moment."

Aleklett is among a group of international experts -- ex-oil executives and geologists -- who believe there is less oil percolating under the ground than the oil industry acknowledges. They say the world has burned up nearly half of all its oil -- an estimated 900 billion barrels of crude.

In industry jargon, that halfway point is the "peak," after which reserves no longer rise but drop.

No one denies this will happen eventually. After all, oil is a finite resource. But these oil skeptics -- so-called "peak" oil analysts -- say the "peak" is coming sooner rather than later, maybe even in 2008. The paint a gloomy picture: falling oil supplies plus rising demand will equal shortages -- and perhaps a rising risk of war.

Mainstream experts, however, dismiss such talk scaremongering.

They say predictions about the end of petroleum have been made since shortly after the first commercial oil rig went up in western Pennsylvania back in 1859.

But the reality, they say, is that supplies are growing, with more oil coming out of Iraq, Russia, the Caspian Sea, and elsewhere.

And if supplies dip and prices rise, these experts say that will spur the industry to explore for more. Plus, breakthroughs in technology will make it easier to extract oil hard to get at now, such as the petroleum locked in sands in Canada.

Michael Lynch, a critic of the peak oil movement, said the movement's guru, geologist Colin Campbell, has a long record of making inaccurate predictions.

"The people who predict peak oil have been predicting it any day now for 15 years," Lynch said. "Like Colin Campbell said in '89 that this is the peak right now, in '91 he said the peak is next year, and in '95 he said it's in '97 and so forth. I've generally been predicting continued rise [in oil supplies] since I started working on this; really making forecasts in the late '80s. I think over the next 30 years you won't see a peak unless it's from the demand side."

But with oil breaking the $50-a-barrel barrier in October, and amid other concerns, the peak oil crowd is grabbing more attention.

One of their most startling claims is the following: Six barrels of oil are now used for every new barrel discovered. Major oil finds -- that is, over 500 million barrels -- peaked in 1964. In 2000, there were 13 such discoveries; in 2001, six; in 2002, two; and in 2003, zero -- the first time that ever happened.

The "peak" oil analysts also say that oil industry investment patterns seem to indicate that there isn't much oil left to discover.

In 2004, the "Financial Times" quoted a study by Scottish energy consultant Wood Mackenzie showing major oil companies had invested $35 billion to develop existing oil fields in 1998. Five years later in 2003, the amount was $50 billion, a record, according to the Mackenzie study. During the same time period, spending on oil exploration dropped from $11 billion to $8 billion. Peak oil analysts contend the oil companies were putting their money where the oil is -- and that's not oil exploration.

Analyst Lynch refuted that claim. Exploration is down, he said, because companies are drilling even more oil from existing fields. He said there are other factors at play as well.

"When you look at oil discoveries and production, these are partly influenced by geology, but they are heavily influenced by politics, economics and infrastructure, and things like that,: Lynch said. "So they [the 'peak' oil people] are mistakenly assuming that what they're seeing is a lack of oil. In other words, geology is determining it, when in reality what's happened is that people in the Middle East cut back drilling because they had a huge surplus of oil and they nationalized their operations in the 70s and so forth."

World: Oil (Part 2) -- Demand Soars As Reserves Dip, Fueling Prices -- And Possibly Conflicts

RADIO FREE EUROPE/ RADIO LIBERTY

Saudi Arabia holds one-quarter of the world’s proven oil reserves -- some 260 billion barrels. But even here there are signs of field depletion.

No major fields have been discovered since 1970.

Aquifers are being drained to pump oil out from deeper and deeper in the ground, a sign the easier and cheaper to drill oil near the surface is gone or going. The Saudis’ and the world’s biggest oil field, Ghawar -- a 500-kilometer-long sliver of land near the Persian Gulf -- is not as robust as it once was.

Mathew Simmons, an energy investment banker and one-time adviser to U.S. President George W. Bush, said no one really knows how much oil the Saudis have. The state-owned oil company, Saudi Aramco, has not provided production data for more than two decades.

But Simmons noted that the Saudis have been talking about the risk of depleting their own reserves since the 1970s.

"What I find interesting is that there clearly has been a running debate going on within the ranks of Aramco going all the way back to the 1970s when Saudi Arabia had the market opportunity, or, you could argue, was forced into opening its valves faster and faster to keep global markets supplied," Simmons said. "And by 1974, when their oil production had grown from under three to over eight million barrels a day in a four year period of time, there were already debates going on within Aramco as to whether they were already overproducing these fields."

On the record, Saudi Aramco officials confidently speak of increasing production in the future.

But many analysts said they are not so sure. They belong to the "peak" oil movement that believes the world has already used up half of all existing oil.

After this "peak," these analysts say oil supplies will start to drop, prices will rise and then risk of conflicts over resources will grow.

Bullish oilmen, however, still enthusiastically point to possible new discoveries in places as far-flung as Colombia and Sudan.

Or the Caspian region, which has long been cited as a potential paradise of oil riches.

In 1997, the U.S. State Department put the possible value of Caspian Sea oil at an incredible $4 trillion. One field, Kashagan in Kazakhstan, was thought to be particularly bountiful.

But as Simmons explained, Kashagan -- and Caspian oil -- might have been more hype than reality.

"Now, there’s an enormous project that got sanctioned to begin development spending in the middle of 2004 called Kashagan that is being billed by some people as the biggest oil field found in the last 30 years," Simmons said. "Interestingly enough, three of its original partners who held collectively 30 percent have already bailed out."

Even oilmen admit that Caspian Sea prospects were probably overblown, although reserves there are still significant.

But new discoveries often do not have a major impact on world oil supply.

"Fifty percent of all the oil we are using today is just from something like 150 oil fields, and there is something like 40,000 [oil fields] in the world," said Kjell Aleklett, president of the Association for the Study of Peak Oil and Gas and a professor at Sweden’s Upsalla University.

But if discoveries are down and supplies dipping, demand is up. Driving it is population growth led by China with 1.3 billion people.

Buoyed by an economic boom, China has overtaken Japan as the world’s second oil-consuming country after the United States.

The U.S. Department of Energy predicts that through 2020, energy consumption in China will rise about 4.3 percent a year, and by at least 3 percent in three other large developing countries: India, Brazil, and Mexico.

Aleklett and other peak oil analysts warn that meeting future demand without seriously drawing down reserves is impossible.

Aleklett said China is aware that oil will be scarcer in the future and is scrambling to buy up or contract for as much oil as it can -- even negotiating with Canada, America’s top energy supplier.

Possible Sino-American jousting for Canadian oil could be just a glimpse of what might be a more fierce global competition to come for black gold.

Michael T. Klare, author of "Resources Wars," noted the biggest oil supplies are found in some of the most volatile regions: the Middle East, Caucasus, and Central Asia. He said major world powers won’t be drawn into direct conflict there but they won’t sit on the sidelines, either.

"But rather, proxy conflicts where all these countries get involved in local disputes within Kazakhstan, within Georgia, Azerbaijan, these other countries; one side favoring one party to a dispute, the other side favoring the other side to a dispute," Klare said. "So you get these big powers getting involved in local conflicts and escalating into something larger."

Klare highlighted the Caspian region. The five states that share its shores -- Kazakhstan, Russia, Iran, Azerbaijan, and Turkmenistan -- have been haggling for years now on how to divide the sea and divvy up its riches. As oil and gas become more precious, Klare said, that competition could become more intense and less compromising.

Aleklett and other peak oil analysts have argued that the West must curb its hunger for oil now to avoid problems later. He pointed out that the United States has 5 percent of the world’s population but uses 25 percent of its resources.

The father of the peak oil movement, the American geologist M. King Hubbert, said that an economic model based of infinite growth but fueled by finite natural resources is doomed.

Ironically, there’s also a saying from oil-rich Saudi Arabia that goes: "My father rode a camel. I drive a car. My son flies a jet airplane. His son will ride a camel."

China's risky scramble for oil

csmonitor.com

Look at this imbalance: The average American consumes 25 barrels of oil a year. In China, the average is about 1.3 barrels per year; in India, less than one.

So as the 2.4 billion Chinese and Indians move to improve their living standards, they're going to want more oil - likely more than can be produced.

That perceived shortage is setting off an intensifying scramble to tie up oil reserves around the world. So far, China has been the most aggressive player. But the competition is just getting going.

The pattern is clear. China has been weighing buying Unocal, a major US oil firm. Last month in Beijing, Venezuela's President Hugo Chávez promised to open that nation's oil and natural gas fields to China. Russia, in effect renationalizing the giant oil subsidiary of Yukos, may offer China a 20 percent chunk of the new firm.

China's efforts to tie up oil and gas resources - in places such as Iran, Saudi Arabia, and Sudan - have not been cheap. But it has an unfair advantage, says Michael Lynch, president of Strategic Energy and Economic Research in Amherst, Mass. Its national oil firms have access to cheap capital from government institutions - and few limits on entering areas seen as sensitive for publicly held Western firms. (Think violence-prone Sudan.)

The challenge is huge. For China and India to reach just one-quarter of the level of US oil consumption, world output would have to rise by 44 percent. To get to half the US level, world production would need to nearly double.

That's impossible. The world's oil reserves are finite. And the view is spreading that global oil output will soon peak.

As a result, "the growing demand for oil is leading to a growing global conflict," warns Amos Nur, a geophysicist at Stanford University. The 1991 Gulf War, the 9/11 attack, and the current war in Iraq are skirmishes that could "pale in comparison with the looming potential conflict over oil with China."

Oil has often influenced history. An American and British oil embargo on Japan, which was close to running out of fuel for its growing navy and empire, was one reason that island nation advanced a plan to attack Pearl Harbor to Dec. 7, 1941. That move brought the US into World War II, at a time when world oil output still was rising. A peak - when it comes - will be a major event shaping geopolitical policy and future prices.

"There is a growing recognition of future oil scarcity, or at least the end of growth," says Jim Meyer, director of The Oil Depletion Analysis Centre in London. "The challenge of producing more and more oil is getting more and more difficult."

Just when it will peak is intensely debated. Conventional oil production could top out in 2022, reckons Leo Drollas, chief economist of the Centre for Global Energy Studies in London. Non-OPEC oil could peak in five or six years. Other experts are more pessimistic.

But many of them, in government or outside, are counting on the market to solve the problem. As prices go up (now at $49 a barrel), the oil industry should increase supply by getting more oil out of old fields or finding new sources, they point out. At some price, Canada's oil sands and Venezuela's heavy oil will become even more commercially feasible.

Last fall, the International Energy Agency in Paris calculated the global oil industry would need to invest $3.1 trillion to keep up with the demand for oil through 2030. That assumes the oil can be found.

At the same time, higher oil prices should discourage the use of SUVs, force people to turn down their thermostats, and cut demand. They could also lower the economic growth that fueled the demand in the first place. Today's uncertainty-related rise in oil prices, up 44 percent in the past two years, will after two or three years reduce world economic growth from what it would be otherwise by a significant 0.8 percentage point, predicts Mr. Drollas.

But Dr. Nur says this faith in market forces is unlikely to pan out in adequate supply.

Nor have efforts to assure supply always worked. In 1970, the seven major international oil companies thought they owned and thus had tied up the huge Middle East reserves beyond the turn of the century. Within five years, the nations there had taken ownership of their own oil - and prices had quadrupled.

So China's best-laid plans may not succeed, especially if other nations outbid it.

"In our business there are no guarantees," says Drollas. Oil is a fungible commodity that is mostly sold to the highest bidder on world markets. "I personally don't buy the idea that this is a battle for resources and that China is going to win."

"The outcome doesn't have to be horrible," Nur adds. "But it will be horrible if we don't pay attention to it." By "attention," he means major conservation efforts, the development of alternatives to oil - now the major fuel used in powering transportation - and the use of diplomacy to avoid conflict.

Crossing the Rubicon: Simplifying the case against Dick Cheney

FromTheWilderness.com

By definition, world hydrocarbon (oil and gas) production peaks when half the planet's reserves have been used up. After that point, every barrel of oil will be harder to find, more expensive to obtain, and more valuable to whoever controls it. Many of the world's foremost experts place that peak between 2000 and 2007.

We live in a global economic system based on endless growth, and that growth is only possible with endless hydrocarbons to burn. Demand for oil and gas is increasing at staggering rates; after peak, there will be demand that simply cannot be met, and energy prices will rise inexorably.

The resulting economic catastrophe may see oil hit $100 per barrel before the end of this decade. Oil not only keeps us warm and moves our cars, it is used to make all plastics and is, together with natural gas, the most important ingredient keeping modern agriculture afloat. It is a little known fact that for every 1 calorie of food energy produced, 10 calories of hydrocarbons are consumed.

We eat oil.

Without cheap oil, billions of people will freeze or starve and unfortunately, there is no combination of renewable energy sources that can replace oil and gas consumption without massive conservation efforts that are nowhere in sight.

Cheney knew about this.

There are no national plans for conservation in America. As Dick Cheney has stated, "The American way of life is not negotiable." Over-consumption is as American as apple pie. Many industry experts have been speaking to the reality of Peak Oil for some time. One of those experts - perhaps the most prominent in the world - was in Dick Cheney's National Energy Policy Development Group (NEPDG).

Just four days after Dick Cheney became Vice President he convened the NEPDG.  Among the experts whose opinion Cheney paid for (with taxpayer dollars) was Matthew Simmons, one of the most respected energy investment bankers in the world. Simmons has been speaking out about Peak Oil for years, and there is no question that the urgent story of Peak Oil is what he told Cheney's NEPDG.

The content of the NEPDG documentation has been illegally withheld from the American public with a rubber stamp of approval from the Supreme Court. FTW has always contended that the deepest, darkest secrets of 9/11 are in those documents. That's why they've been guarded so tightly.

Cheney knew about Peak Oil in 1999 as CEO of Halliburton, long before was Vice President. A speech he gave at the London Institute of Petroleum demonstrates this clearly.

As stated in Crossing the Rubicon, "By way of confirmation, people in and close to the oil industry are reporting that increased drilling is not resulting as yet in significantly increased supply."

A crisis of this magnitude required a crisis plan, something the Neo-Liberals didn't have. The Neo-Conservatives, including Dick Cheney, had such a plan: manufacture a crisis - one that had long been imagined as necessary by elite planners inside the national security state 14- and use it to maintain permanent war to steal the world's last remaining hydrocarbons and temporarily stave off the Peak Oil crisis.

When the Gushing Stops - Peak Oil Conference

OAKLAND, January 17, 2005 - Post Carbon Institute will be one of the supporting partners at “When the Gushing Stops…”, the First Peak Oil Conference in Bangalore, India, on Friday, January 28, 2005.

 

Assisted by Post Carbon Institute, Project Agastya (an initiative of the 25/Bangalore Foundation, whose aim is to transform Bangalore into a Sustainable Eco-city by the year 2025), the Bangalore Management Association, and the Institution of Engineers (Karnataka State Chapter) are organizing a one-day conference examining the implications of peak oil.

 

This is believed to be the first peak energy conference to be held in the developing world and quite possibly in the Southern Hemisphere.  It will examine the difficulties that emerge when the world reaches peak oil production, the ramifications for India, and potential responses.

 

The program will be presented by various stakeholders in the energy sector, NGOs, the private and public sector, research and educational institutions, professional bodies, experts in the field, and the media.

 

The initial inspiration for the conference was the documentary The End of Suburbia: Oil Decline and the Collapse of the American Dream, a film that Post Carbon Institute distributes. 

 

Chairman of Project Agastya, Mr P.K. Shanbhag, said “Fossil fuels are not endless, and the day is fast approaching when the supply of petroleum will diminish in most countries”.

 

“If we are to make the transition comfortably from the use of oil to other resources, we must act now,” Mr Shanbhag said.

 

Founder of Post Carbon Institute, Mr Julian Darley, stated “this day may well come within this decade”.

 

“We use oil in practically every aspect of our lives, from transportation to plastics to food,” he said.  “We need to prepare for this transition,” Mr Darley added.

 

One of the stated objectives of the conference is to create a working group tasked with the organization of an international Workshop/Conference on Peak Oil in middle to late 2005.

 

Mr Darley believes it is important that developing countries begin preparing for an energy- constrained future and that it is especially crucial that India and China, the world’s most populous nations, are engaged in conversation and action.

 

For more information the conference, visit http://www.postcarbon.org. 

 

Post Carbon Institute is a think and action tank that explores in theory and practice what cultures, civilisation, governance & economies might look like without the use of (non-renewable) hydrocarbons as energy and chemical feedstocks. Post Carbon Institute advocates global relocalization as an essential response to peak oil, resource conflicts, climate change and other ecological problems.   Their “Outpost” program is designed to start the relocalization process by mobilizing community groups to experiment on how to meet their essential needs within walking distance. http://www.postcarbon.org

 

Project Agastya is an initiative by the 25/Bangalore Foundation to enhance the quality of life in Bangalore by transforming Bangalore into a Sustainable ecoCity by 2025, through efficient participation of Government, various stakeholders, citizens, Educational Institutions & NGOs, and by the deployment of Environmentally Sound Technologies.

The Act!ve Agastya Network is an concept of Project Agastya for bringing better Sense in Urban Resources Management. The primary objective is to facilitate deployment of factual information for the application of environmentally sound life style and practices amongst various stakeholders in domestic, industrial and services sector at Bangalore through younger generation with the support of community, and transform Bangalore into a city of RESPONSIBLE CITIZENS.  http://www.projectagastya.org

ENDS

 

David Room, Communications, Post Carbon Institute, Phone (510)547-8313 (US)

 

P.K. Shanbhag, Chairman, Project Agastya. Phone : (Resi.) 2347 9828. Mobile : 98801 07467.

Vasanth Rajendran, Coordinator, Project Agastya. Phone :93412 70149

Administrative Office : Project Agastya, MIG 122, KHB Colony 2^nd Stage. Basveshwara Nagar, Bangalore – 560 079.

eMail : snap.agastya@gmail.com; project.agastya@gmail.com

Picnic For The Planet 2005

Scoop

Civilisations have come and gone over the millennia. Humans have grouped together to build cities, develop technology, specialise their labour, and create high culture. But all such civilisations have eventually expired: some because they overused their resources; some weakened by war; some we know not how.

Our civilisation is the first to be truly global. It is the first to reach out to other planets, and to develop technologies to manipulate nature at the sub-atomic and sub-genetic level. And it is the first to develop a level of personal comfort that creates the illusion and the expectation that, thanks to our civilisation and our technology, we can forever conquer cold, hunger, pain, illness and eventually death itself.

We have done this thanks to the use of one substance: oil.

Ours is the only civilisation ever to be based on oil and it is the only one there ever will be. Oil has enabled us to use unprecedented amounts of other natural resources, mining huge quantities of minerals, vacuuming the oceans of fish thousands of miles away, farming intensively till the soil is just stuff you add chemicals to in order to grow mass-production food, felling vast forests, and transporting all this stuff, and ourselves, around the planet.

I recently came across a true story that symbolises to me what this oil-based civilisation is about. Before Christmas, developers in Hong Kong were about to demolish seven, forty-storey apartment towers, containing two and a half thousand apartments with great views built for low-income folk. The redevelopment was intended to produce a smaller number of luxury apartments. This was the tallest and largest building ever planned for deliberate demolition, producing 200,000 tonnes of waste, to be dumped at public expense. The punch line is that these apartments were brand-new, fitted out, furnished, and just waiting for their first occupants. Amazingly, the story has a happy ending. I learned just last week that pressure from Green groups in Hong Kong has led to the demolition being called off.

This is a story for our time. It shows how modern economics and cheap oil encourage a massive waste of resources. It shows the extent to which the widening gap between rich and poor denies those on low incomes not just the things money can buy, but also the things it traditionally could not buy, like a view.

It is oil that has enabled the global population and the ecological footprint of our civilisation to grow so large that it threatens the physical limits of the planet itself: its soils, forests, and fish, its beautiful and unique living creatures, and the chemical and physical cycles on which our lives depend. It is oil, along with coal and gas, that has raised the carbon dioxide content of the whole planet’s atmosphere by more than a third since the start of the industrial revolution - a blink in time in the history of the planet. It is oil, and other fossil fuels, that is causing glaciers to melt worldwide; and that appears to be associated with a marked increase in freak climatic events such as storms and floods and heatwaves. It is oil and coal that risks raising the sea level into your seaside homes; allowing tropical pests and diseases like malaria into New Zealand; and extinguishing our threatened plants and animals because they have nowhere else to go.

It is oil that makes it seem normal for two ships to pass in the Tasman Sea, one carrying Griffin’s biscuits and Tip Top ice cream from New Zealand to Australia, the other carrying Arnott’s biscuits and Streets ice cream from Australia to New Zealand. And with a net effect of what, exactly?

Our oil consumption has been so extravagant that we have used up, in just one century, around half of what the planet has to offer. When that half-way point - known as “peak oil” - is reached, it becomes physically impossible to increase production no matter how hard you pump it.

When we reach that peak, demand will continue to rise, not just from Western societies that have used most of the oil so far, but also from countries, such as China and India, trying to catch up with our level of motorisation and industrialisation. There is no technology on the horizon that can replace our present consumption of oil, though there are many that can make a contribution. We cannot afford to turn to coal without causing run-away climate change. The only answer is to learn to use energy much more effectively.

The point at which demand outstrips the capacity of the wells to supply is the point at which oil prices rise inexorably and countries at the end of the supply line with little military power are likely to miss out. At first, it will cost you three dollars a litre instead of one to fill up your car. Later, there will be absolute shortages, no matter what you are prepared to pay. The cost of farming, fishing, manufacturing and international trade will skyrocket, and our international markets will no longer be able to afford our butter.

No-one can say for sure when this peak will be reached. The Government has picked 2037 as its best guess, based on what oil companies, the US Government and the International Energy Agency are saying. To be frank, this is day-dreaming. Discoveries of oil peaked in the 1960s. For many years, we have been burning four times as much as we have been finding. When you look beyond the oil companies to independent, experienced petroleum geologists, you find a consensus that we may well have less than ten years before we reach this terrible tipping point. The end of cheap oil is coming towards us with the force of a tsunami and New Zealand is not ready. Only the Greens are planning for how to cope.

If it is oil that has caused the growth of a consumer society that threatens the physical limits of the planet, it is peak oil that is causing an unprecedented attack on the human values that we have, until now, associated with civilisation. History tells us that when civilisations are threatened, empires get nasty. It should come as no surprise, then, that the United States - an empire dependent on oil - is doing everything in its power to secure the world’s fast dwindling oil reserves, even though that means trampling on the very freedoms it purports to uphold.

Peak oil is the reason for the invasions of Afghanistan and Iraq. Peak oil is the reason for the war on terrorism, designed to make us so afraid of being bombed by Islamic fundamentalists that we co-operate in the destruction of our own freedoms. And peak oil is the reason our government, in acquiescing to US fear-mongering over 9/11, has pursued legislation under which you may be imprisoned without charge or fair trial, you may have your assets seized without proof of guilt, and you may be denied information on what you are even accused of, and denied a passport in your own country.

Greens Predict Oil Crisis In 10 Years

The New Zealand Herald

An oil-free New Zealand is on the Green Party's agenda.

At the party's "Picnic for the Planet" on Waiheke Island yesterday, co-leader Jeanette Fitzsimons warned of an oil crisis within 10 years.

"The end of cheap oil is coming towards us with the force of a tsunami and New Zealand is not ready," she said.

Oil consumption had been so extravagant that in one century the world had used up about half of the planet's resources and demand was continuing to grow.

When the half-way point in oil reserves was reached - known as peak oil - it would become physically impossible to increase production and an oil crisis would occur, she said.

The Government last year acknowledged the peak oil point and has estimated it will be about 2037, but Ms Fitzsimons said there was a consensus among independent petroleum geologists that it might be less than 10 years away.

When the point was reached, prices would rise inexorably.

"At first it will cost you $3 per litre instead of $1 to fill up your car. Later, there will be absolute shortages, no matter what you are prepared to pay.

"The costs of farming, fishing, manufacturing and international trade will skyrocket and our international markets will no longer be able to afford our butter."

Ms Fitzsimons said the only answer was to learn to use energy more effectively.

The Greens have a number of ways they would achieve this, such as doubling the efficiency of NZ's cars, trading less low-value bulk goods globally, using less air transport and more high-tech wind-assisted shipping and producing more local food.

"I cannot disguise the enormity of the task we face," Ms Fitzsimons said. "It is no less than to transform our civilisation so it can meet the challenges of peak oil, climate change and ecological collapse."

In October, the Government launched a discussion document on sustainable energy that acknowledged the world and New Zealand faced serious problems regarding oil and said New Zealand's current energy habits were unsustainable.

Yesterday, Energy Minister Trevor Mallard, who took over the role from Pete Hodgson in December's Cabinet reshuffle, said industrialised nations had to look more closely at alternative forms of fuel.

"But that timescale depends on the discovery or lack of discovery of oil deposits around New Zealand and the world."

He said it was good for the Greens to point out that the world did have issues.

Ms Fitzsimons also addressed New Zealand's political environment, saying National Party leader Don Brash belonged to another era and, when he took the podium at Orewa this month, would not propose any solutions to the challenges of the 21st century.

The Greens hoped to work with Labour, despite policy differences, after the election, she said.

"We will use our influence to support the steps Labour is taking to protect our country from these threats and build a sustainable future."

Missing from Ms Fitzsimons' speech was any mention of genetic modification, the issue that caused tensions between Labour and the Greens after the last election.

The Greens polled 5.4 per cent in the Herald-DigiPoll December survey, well above Act, United Future and the Maori Party.

WHAT IS PEAK OIL?

Peak oil is where global oil production peaks and, due to continuing demand, prices escalate to a point where current uses are not sustainable.

The questionable future of oil by Ned Rozell

SitNews

"Civilization as we know it will come to an end sometime in this century unless we can find a way to live without fossil fuels," urged one reputable scientist.

"Relax, the end is not near," said another.

A few of the nation's authorities on the world's oil supply gathered in December 2004 for the annual meeting of the American Geophysical Union in San Francisco. Organizers of the conference created a session titled "Running on Empty? Oil: How Much, Where and at What Cost?" The session attracted standing room only crowds and kindled debate on the amount of recoverable oil beneath the skin of our planet.

Several scientists mentioned "Hubbert's Peak," the name given to the 1956 prediction of an oil company geologist that U.S. oil production would peak in the early 1970s. To the surprise of many in the oil industry, Hubbert was right, said Kenneth Deffeyes of the Princeton University Department of Geosciences. Other scientists applied Hubbert's method to world oil production and predicted that the peak year will be between 2004 and 2008. Deffeyes narrowed the date down to Thanksgiving Day 2005 in his book, "Beyond Oil; The View from Hubbert's Peak."

"When the peak occurs, increasing demand will meet decreasing supply, possibly with disastrous results," wrote conference speaker David Goodstein, the vice provost at the California Institute of Technology in his book, "Out of Gas; The End of the Age of Oil."

Goodstein gave the example of the Arab oil embargo as foreshadowing what might happen after world oil production peaks: "As we learned in 1973, the effects of an oil shortage can be immediate and drastic, while it may take years, perhaps decades, to replace the vast infrastructure that supports the manufacture, distribution, and consumption of the products of the twenty million barrels of oil we Americans alone gobble up each day."

On the other side of the debate was William Fisher, a professor of geology at the University of Texas at Austin. Fisher said we have enough oil to avoid disaster until the transition to natural gas, then hydrogen. He pointed out that the Hubbert's Peak equation assumes that people know how much oil is "ultimately recoverable," and that's not the case. He also said the Hubbert's Peak predictors ignore "field reserve growth," or the ability to get more out of certain oil fields as technology improves.

Fisher said that future global demand for oil will be within current estimates of recoverable oil, and a bigger challenge will be meeting the world's future demand for natural gas, "but it too will be met in sufficient volumes to bring us into the hydrogen economy some 50 to 60 years from now."

Goldstein countered that fuel cells are a possible source of energy for generating electricity and for powering cars and trucks, but to extract the hydrogen that powers the fuel cells using current technology requires about six times as much fossil fuel as the hydrogen would replace. Fisher had no argument with that.

"There are plenty of challenges with hydrogen now, but my assumption is that over the next several decades those can be worked out," Fisher said.

Goldstein said there is no magic bullet to replace oil, but nuclear power is one of the most favorable energies for the transition time between oil and whatever next fuels our cars and keeps our wall sockets working.

"The best hope for our civilization lies in technologies that have not yet arisen," Goldstein wrote. "Most likely, progress will lie in incremental advances . . . based on principles we already understand: controlled nuclear fusion, safe breeder reactors, better materials for manipulating electricity, more efficient fuel cells, better means of generating hydrogen, and so on. Developing those technologies will require a massive, focused commitment to scientific and technological research. That is a commitment we have not yet made. We urgently need to make it."

Brave nightmare world - The End of Oil: On the Edge of a Perilous New World by Paul Roberts

Asia Times Online

If the past is truly the prologue to the future, then author Paul Roberts, a longtime contributor to Harper's magazine, has served us well. For in large part, his book is a history of not only oil but of humanity's quest for energy. As he notes, for most of the past 6,000 years, human history has been characterized by a constant struggle to harness ever-larger quantities of energy in ever more useful ways. The wide-scale use of coal in England set the conditions for the Industrial Revolution. A century later, oil and natural gas completed the transformation, dragging the industrializing world into modernity and in the process, fundamentally and irrevocably reordering life at every level.

In short, energy is the Holy Grail. As Roberts writes:

Energy has become the currency of political and economic power, the determinant of the hierarchy of nations, a new marker, even, for success and material advancement. Access to energy has thus emerged as the overriding imperative of the 21st century. It is a guiding geopolitical principle for all governments, and a largely unchallenged heuristic for a global energy industry whose success is based entirely on its ability to find, produce, and distribute ever-larger volumes of coal, oil, and natural gas, and their most common by-product, electricity. Yet even a cursory look reveals that, for all its great successes, our energy economy is fatally flawed, in nearly every respect. The oil industry is among the least stable of all business sectors, tremendously vulnerable to destructive price swings and utterly dependent on corrupt, despotic "petrostates" with uncertain futures.

That, however, does not begin to cover the downside. Other factors must include climate change due to the greenhouse effect; the finite quantities of petroleum remaining; the challenges of finding, producing and distributing it; its use in generating electricity - the fastest-growing segment of the energy market - and its overwhelming demand on the existing infrastructure; the breakdown of the energy system in the developing world, where the urgent quest for survival doesn't allow for environmental considerations; and the future energy demands of countries such as China or India, to name just a few of the issues Roberts covers.

Roberts' reporting is both wide-ranging and insightful. In detailing the global oil addiction, his travels take him from Saudi Arabian oilfields to Azerbaijani pipelines to natural-gas terminals in Mexico to a Vancouver power company to wars between competing gas-station chains in China.

But he never strays far from his central point: that the energy economy is changing, and not always for the better. We no longer have a choice in the matter. To use a favored expression from those who talk about the probabilities of another September 11, it is not a question of if, it's a question of when.

Make no mistake, change is coming. And if history is any guide at all, it will be traumatic. That is assuming that the countries of the world actually try to cooperate with one another on issues such as energy conservation or adopting new energy technologies, ie natural gas, hydrogen, solar and wind. It also assumes willingness on the part of the existing multinational energy companies to move forward on these technologies instead of trying to wring every last cent out of their existing capital stock. That is not something the current US administration is likely to encourage given its existing ideology.

Iraq and Tsunami: Living In Harms Way

Al-Jazeerah

"It's entirely up to us. If we fail - if we blow up or degrade the biosphere so that it can no longer sustain us - nature will merely shrug and conclude that letting apes run the laboratory was fun for a while but in the end a bad idea."
Ronald Wright A Short History of Progress

The war in Iraq and the earthquake-tsunami in South East Asia can be connected by comparing their respective death tolls or the amount of money spent by the US ($350 million in aid vs $148 billion in warfare), but there is a much more important unifying perspective

Recent books on societal collapse by Jared Diamond, Ronald Wright and Roy Woodbridge join Joseph Tainter's work in providing a context for understanding: billions of innocents live today in harm's way, in the path of predictable events which promise almost unimaginable tragedy to our global society.

Autopsies can be done on previous collapsed societies and we can understand the cause and effect of the death of these superorganisms and we can learn lessons from their demise, hopefully, in order to avoid similar accident.

But the focus on the reasons for societal collapse is but part of a larger dawning realization that humanity is just another species in the 3 billion year unfolding of life on Earth and that the crescendo of recent population growth and magnificent cultural and technological complexity must be akin to the last few bars of one of those classic Beatle songs from those far away 60s.

The line hugs the floor of the graph for tens of thousands of years but in the 16th century it starts to go up. By the time we all studied the graph in school human population had been growing exponentially in an awesome spike for several centuries. What goes up... a flat line for thousands of years then the glorious spike of amazing human complexity. Then over the cliff and a flat line hugging the floor of the graph for thousands of years again?

There is an emerging new story explaining today: humanities enormously successful use of fossil fuels combined with the coevolution of science and investment - engineering or technology - has allowed human populations to increase exponentially, building niches in almost every earthly environment and every layer of the expanding complexity of city life.

But every species that expands its populations in an exponential manner that science studies inevitably crashes; most often from overuse of limiting factor resources. The human population quadrupled during the past century while the total global economy increased forty times. This is a tremendous increase of demand upon the biosphere by a species that now has at least 100 times the cumulative biomass of any previous animal species.

There is reasonable evidence that global oil production is about to peak while demand continues to grow, especially in growing economies such as China and India. Energy from fossil fuels is a one time chance that has greatly expanded human population. Shouldn't we be giving proper attention to our perilous situation?

Insurance companies will confirm that there are now more people and more human complexity (property) in harms way, vulnerable to earthquake, tsunami, hurricane, flooding, fire or any other natural disaster. A seven billion human population interdependent in and forcefully connected by a growing global economy is also at increasing risk from disease.

War has always been the Horseman most feared by the vulnerable; severe resource depletion promised by the demands of billions on a finite planet, exacerbated by unrealistic dependence upon very finite and now increasingly tapped out supplies of oil - for agriculture in our modern world as well as transportation, industry, heating, etc., promises increasing and deadly resource wars of which Iraq must be only the first, small battle.

Earthquake proofing building standards and tsunami alert networks are examples of technological innovation that can be implemented to protect increasingly vulnerable populations from natural disasters. A 9.0 earthquake would overwhelm most prevention planning, but a tsunami warning system such as is deployed along developed countries on the Pacific Rim would have probably saved tens of thousands of lives in vulnerable populations surrounding the Indian Ocean.

Necessary preventive planning steps that need to be undertaken to safety proof humanity from the worst case scenario of societal breakdown due to severe resource depletion and subsequent resource wars include:

a much more developed world governance system with a strong rule of law,

PLUS international cooperation in much more rapidly developing potential non-fossil energy technologies - removing subsidies from fossil fuel development and using these funds to accelerate investment into government and business partnerships to develop solar, wind, tidal, etc. power, for example,

PLUS cooperative planning to safeguard globalization by among other regulation removing transportation subsidies and by building firewalls to protect regional societies and economies from contagion and corrosion,

PLUS greatly reduced individual consumptive footprints: weightless or much more efficient use of materials in living quality instead of quantity lifestyles.

Unfortunately for those billions of innocents in harm's way, we have chosen another path and are moving in a much different direction away from these necessary beginning steps to try and prevent an imminent catastrophic population crash.

The dawning realization of our precarious position is probably coming too late. Those that should be warning the vulnerable people on the beach are much more concerned with their own short term economic interests. Or, perhaps more accurately, human timeframes and preoccupation with subsistence and herd status in the short term does not allow for planning to safety proof against building 'slow motion catastrophes'.

Compounding the dilemma of those who advocate for needed change, is religious fundamentalist denial - in Rome, New Delhi and Jesusland as well as in the Islamic world. Powerful religious leaders and those who politically serve such leaders reject the whole scientific worldview and in particular it's vision of humanity as just another species subject to the constraints of nature. Plus know-nothings and greenwashers serving business interests who are powerful impediments to even informed debate about our precarious situation.

It will be very difficult to change paths to escape the rush over the cliff we are heading for. The crowd pushes us forward; we all have our lives to live. If there was adequate warning could anybody stop?

"It is essential to know where we are in history. If macroeconomic patterns develop over periods of generations or centuries, it is not possible to comprehend our current conditions unless we understand where we are in this process. We have the opportunity to become the first people in history to understand how a society's problem-solving abilities change. To know that this is possible yet not to act upon it would be a great failure...."
Joseph Tainter

The questionable future of oil by Ned Rozell

SitNews

"Civilization as we know it will come to an end sometime in this century unless we can find a way to live without fossil fuels," urged one reputable scientist.

"Relax, the end is not near," said another.

A few of the nation's authorities on the world's oil supply gathered in December 2004 for the annual meeting of the American Geophysical Union in San Francisco. Organizers of the conference created a session titled "Running on Empty? Oil: How Much, Where and at What Cost?" The session attracted standing room only crowds and kindled debate on the amount of recoverable oil beneath the skin of our planet.

Several scientists mentioned "Hubbert's Peak," the name given to the 1956 prediction of an oil company geologist that U.S. oil production would peak in the early 1970s. To the surprise of many in the oil industry, Hubbert was right, said Kenneth Deffeyes of the Princeton University Department of Geosciences. Other scientists applied Hubbert's method to world oil production and predicted that the peak year will be between 2004 and 2008. Deffeyes narrowed the date down to Thanksgiving Day 2005 in his book, "Beyond Oil; The View from Hubbert's Peak."

"When the peak occurs, increasing demand will meet decreasing supply, possibly with disastrous results," wrote conference speaker David Goodstein, the vice provost at the California Institute of Technology in his book, "Out of Gas; The End of the Age of Oil."

Goodstein gave the example of the Arab oil embargo as foreshadowing what might happen after world oil production peaks: "As we learned in 1973, the effects of an oil shortage can be immediate and drastic, while it may take years, perhaps decades, to replace the vast infrastructure that supports the manufacture, distribution, and consumption of the products of the twenty million barrels of oil we Americans alone gobble up each day."

On the other side of the debate was William Fisher, a professor of geology at the University of Texas at Austin. Fisher said we have enough oil to avoid disaster until the transition to natural gas, then hydrogen. He pointed out that the Hubbert's Peak equation assumes that people know how much oil is "ultimately recoverable," and that's not the case. He also said the Hubbert's Peak predictors ignore "field reserve growth," or the ability to get more out of certain oil fields as technology improves.

Fisher said that future global demand for oil will be within current estimates of recoverable oil, and a bigger challenge will be meeting the world's future demand for natural gas, "but it too will be met in sufficient volumes to bring us into the hydrogen economy some 50 to 60 years from now."

Goldstein countered that fuel cells are a possible source of energy for generating electricity and for powering cars and trucks, but to extract the hydrogen that powers the fuel cells using current technology requires about six times as much fossil fuel as the hydrogen would replace. Fisher had no argument with that.

"There are plenty of challenges with hydrogen now, but my assumption is that over the next several decades those can be worked out," Fisher said.

Goldstein said there is no magic bullet to replace oil, but nuclear power is one of the most favorable energies for the transition time between oil and whatever next fuels our cars and keeps our wall sockets working.

"The best hope for our civilization lies in technologies that have not yet arisen," Goldstein wrote. "Most likely, progress will lie in incremental advances . . . based on principles we already understand: controlled nuclear fusion, safe breeder reactors, better materials for manipulating electricity, more efficient fuel cells, better means of generating hydrogen, and so on. Developing those technologies will require a massive, focused commitment to scientific and technological research. That is a commitment we have not yet made. We urgently need to make it."

The End of Oil?

TechnologyRevew.com

If the actions-rather than the words-of the oil business's major players provide the best gauge of how they see the future, then ponder the following. Crude oil prices have doubled since 2001, but oil companies have increased their budgets for exploring new oil fields by only a small fraction. Likewise, U.S. refineries are working close to capacity, yet no new refinery has been constructed since 1976. And oil tankers are fully booked, but outdated ships are being decommissioned faster than new ones are being built.

If those clues weren't enough, here's a news item that came out of Saudi Arabia on March 6, 2003. Though it went largely unremarked, the kingdom's announcement that it could not produce more oil in response to the Iraq War was of historic importance. As Kenneth Deffeyes notes in Beyond Oil: The View from Hubbert's Peak, it meant that as of 2003, there was no major underutilized oil source left on the planet. Even as established oil fields have reached their maximum production capacity, there has been disappointing production from new fields. Globally, according to some geologists' estimates, we have discovered 94 percent of all available oil.

The Saudis' announcement arrived right on schedule-at least, once the three-year delay imposed by OPEC's anti-U.S. embargo and production cutbacks of the 1970s was factored in. In 1969, the prominent geologist M. King Hubbert predicted that a graph of world oil production over time would look like a bell curve, with a peak around the year 2000. Thereafter, he argued, production would drop-slowly at first, then ever faster.

Hubbert had a track record as a prophet: his 1956 forecast that U.S. domestic oil production would peak in the early 1970s proved correct. Kenneth Deffeyes, who started out in 1958 as a young petroleum geologist at Shell's Houston labs working alongside Hubbert, became so convinced by the man's theories that by 1963 he had left the oil business, except for occasional consulting work; he is now a professor emeritus of geosciences at Princeton University. In Beyond Oil, Deffeyes takes readers through Hubbert's analysis in a highly readable style, even boiling down the complex mathematics into a few pages of graphs.

The prognosis? Deffeyes has no doubt that by 2019, the year in which Hubbert's theories indicate global oil production will drop to 90 percent of current rates, human ingenuity will have found replacement energy sources (see "What Energy Crisis?", p. 19). But Deffeyes is optimistic about the long term only because he believes that by 2010, pressures will grow so intense that they'll create the resolve necessary to develop a new energy ­economy. In the short term, he foresees continually rising oil prices that force industry after industry closer to the wall. He fears not just escalating resource wars around the world but also mass starvation in some countries, since the 6.4 billion people living on the earth today are fed thanks largely to the successes of the 20th century's "green revolution," which, among other innovations, brought petrochemical-based fertilizers into wide use.

Because 15 years ago we failed to begin developing the new energy sources and technologies we need now, Deffeyes argues, in the immediate future we'll have to rely on what we've got. In Beyond Oil, he examines how we might optimize the use of our geologically derived energy sources.

Deffeyes suggests that coal will make a comeback and that Fischer-Tropsch conversion-the process by which the Nazi regime turned coal into gasoline to keep its Panzers running during WWII-might become commonplace. He grants that there'll be an outcry over the ecological costs of burning coal; similarly, there'll be much agonizing as nuclear power plants are again rolled out. But Deffeyes believes that M. King Hubbert, whose 1956 paper predicting the U.S. oil production peak is titled "Nuclear Energy and the Fossil Fuels," was right: nuclear power will be part of our response to decreasing reserves of oil and natural gas, as necessity overrides any political opposition.

Ultimately, says Deffeyes, we may just have to resign ourselves to relying more on coal, wind, and nuclear fission for ­electricity and switching to high-efficiency diesel and hybrid automobiles in order to ration our remaining oil reserves for as long as possible. Abundant energy from fossil fuels was a one-time gift, Deffeyes concludes, that lifted humanity up from subsistence agriculture and has led to a future based on renewable resources.

Talk of oil decline moving into mainstream

AP Wire

Until about five months ago, Mel Hutto had never heard of "peak oil," the belief that global oil production will decline and never return to the levels that have nourished American lifestyles.

Now the 66-year-old retired business consultant says he will change his lifestyle and campaign in his hometown of Bellingham, Wash., about the need to reduce reliance on oil.

"We're going to be without oil. The whole industrial culture will at some point start breaking down," said Hutto, who, out of curiosity attended a conference on the topic in this southwest Ohio town. "I tried to think this wasn't real and wasn't really going to happen."

Talk of peak oil is moving from obscure energy workshops and technical journals into the social consciousness via books, National Geographic and other magazines and college curriculum.

"It's beginning to move more to the mainstream of public discussions," said Frank Laird, associate professor of technology and public policy at the University of Denver's Graduate School of International Studies. "There is a lot of unease about oil and energy."

The notion began in the 1950s when geophysicist M. King Hubbert predicted that global oil production would peak between 1990 and 2000. The prediction - based on production profiles and estimates of oil reserves - was largely confined to scientific circles.

Paul Thiers, assistant professor of political science at Washington State University Vancouver, has added the topic to his natural resources class. He said the fighting in Iraq and rising gasoline prices are generating interest in the subject.

The world uses about 80 million barrels of oil a day, and consumption continues to increase. U.S. consumption alone is expected to grow nearly 50 percent in the next 20 years.

How soon production will begin to decline is dividing oil experts. Some believe it is imminent. They say discoveries of oil have slowed and that there is little left to be found. Others believe oil will be abundant for at least several decades and that new technologies to extract oil will help ensure plentiful supplies for a long time.

"I can't deny it's coming. What I do deny is it's around the corner. It's not peaking," said Robert Ebel, a petroleum geologist and head of the energy program at the Center for Strategic and International Studies, a Washington, D.C., think tank.

Ebel said consumers will switch to other forms of fuel before oil shortages occur.

But Matthew Simmons, who has been researching oil depletion and peak oil for 10 years, said the peak might already have occurred.

"We don't have the data to say it will happen in five years or it happened last year," said Simmons, president of the Houston energy-investment advisory bank Simmons and Company. "It might be two or three years or it might be seven."

About 200 people in November attended what was billed as the first national conference for laymen on peak oil. The session was held in Yellow Springs, a liberal-leaning village and home to Antioch College, which has a history of social activism and civil disobedience.

The main speaker, Richard Heinberg, believes oil production will peak within five years. Once production begins to decline, the oil-reliant U.S. economy will begin to shrink, and transportation, power and other oil-dependent products and services will become much more expensive, he said in an interview.

"It means the undermining of the whole way of suburban life that has been developed in America," said Heinberg, who wrote "The Party's Over," a book describing the imminence of peak oil.

The conference was hosted by Community Service Inc., a Yellow Springs group founded in 1940 and dedicated to developing a nation where the population is distributed in small self-sustaining communities.

Pat Murphy, executive director, believes a decline in oil production will force Americans to abandon gas-guzzling cars, long commutes to work and their large homes in the suburbs. He sees the suburbs being replaced by small, self-sufficient communities - many in the country - that use alternate energy sources and grow their own food.

"We can't ship Caesar salads from California to Canada any longer," he said.

Some people who attended the conference are acting on their fears.

Jifunza Right-Carter, a Chicago physician, has purchased 40 acres of land outside of the city to use alternate energy sources such as solar and wind power and to hold classes for people interested in ways to reduce reliance on oil.

"It's not something that we just have to throw up our hands and say we're doomed," Right-Carter said.

Hutto said he intends to try to establish a community of between 100 and 200 people devoted to using alternate forms of energy and growing their own food.

"My life is going to be very different than I planned it," he said. "It really is a historic conference. I think we're going to look back at this little event in Yellow Springs, Ohio, as a starting point."

Peak Oil?

LewRockwell.com

It is generally accepted in the industry, as I understand it, that we have probably found all of the major oil reserves that we are going to find. That doesn't mean there aren't major reserves out there to develop – such as offshore Sao Tome or deep in Siberia. It does mean that, most likely, knowing what we know about the Earth's geology, there probably is not another Ghawar formation (the world largest petroleum deposit, located in eastern Saudi Arabia) lurking out there yet to be discovered.

This, of course, could be very wrong. But the bet, right now, is that it is not.

Sure, there are alternatives. There are huge bitumen deposits in Venezuela and Alberta, tar sands that combined hold more than twice the current estimated world reserves of liquid crude oil. But bitumen is costly to refine, a potential environmental nightmare to extract, and right now, only a tiny fraction of the crude in either the Athabasca oil sands or the Orinoco Belt can be recovered.

There's a lot of shale in North America, and the process to synthesize crude from shale is fairly old and well known. It is also water intensive, and not terribly economical right now (because most of the shale is buried out West, where there is very little water). The technology is pretty well established to make synthetic crude oil from coal (lots of North American coal too) or natural gas, or even turkey guts or pig manure – if the price is right.

But none of that matters, because while synthetic crude, whether made from bitumen or natural gas, makes great diesel fuel, kerosene and fuel oil (some buses in Washington, D.C., for example, are powered by diesel synthesized from natural gas), it tends to make really lousy gasoline. Or very little gasoline. And I cannot emphasize enough – right now, gasoline is what everyone wants. Gasoline is what makes the world go round.

So the question is not "when will the crude oil run out?" but "how can we best use the petroleum we have until other economically viable alternatives present themselves?" (I'm not holding my breath for fuel cells any time soon.) That becomes what folks here in Washington call a "policy question," which leads to think tankery, publication of "papers" and funny little books called monographs, conferences, government initiatives, and all manner of other sundry evils.

We cannot ignore the fact that this an industry interlaced with government from top to bottom, whether we are talking about the huge state-owned firms of the big producing nations or our own heavily regulated supermajors. That is the reality, lamentable and regrettable as it is. But as libertarians, we need to remember a few things. First, whatever ends up replacing petroleum will come in its own good time, later than we'd like but probably sooner than we expect. It will come because it stores energy and power better than gasoline does and more cheaply to boot. It will come with some tremendous benefits and some unfortunate drawbacks. Consider as you lament the evils of crude oil: the fairly accidental discovery of kerosene and expansion of the refining process in the second half of the 19th century saved whales from an early mass extinction while at same time making nighttime light and winter heat affordable to even the most impoverished parts of Asia, Africa and Latin America. Gasoline itself was originally a waste product, largely unused until the invention of the internal combustion engine, and automobiles made for cleaner streets (no more manure) and safer farm equipment, given that farmers no longer had to wrestle with motors that had minds of their own. Kerosene itself languished as an unloved byproduct of refining for several decades until the invention of the jet engine.

Second, that new fuel will probably not come as the result of government-sponsored research. Government efforts to target new development – whether hydrogen fuel cells, hybrid engines, coal gasification, ethanol subsidies – may contribute some, but the kind of thinking and investing needed to find or make that new fuel probably cannot be done by government bureaucrats, scientists or regulators, who can only think incrementally and usually only consider efficiency and conservation, rather than entirely new ways of doing things.

I don't necessarily trust technology, but I do trust human ingenuity. Civilization as we know it will grind to a halt without the energy we derive today from crude oil, and that's in and of itself is motivation enough to make sure that future energy is widely available at prices people can afford.

Runaway Train

emagazine.com

Consider this basic and sobering group of facts: In the 100 years and change since we dug that first well, the human race has used half of all the oil on the planet. Author Michael C. Ruppert points out that this oil took literally millions of years to produce, and is the result of climactic conditions that have existed on a grand scale at only one time in the Earth's 4.5 billion-year history.

Colin Campbell, a respected oil geologist who has worked for many of the majors and is the author of the 1997 book The Coming Oil Crisis, believes we have, at best, one trillion barrels of the easiest-to-reach fossil fuel left, with some additional harder-to-reach reserves in oil from coal and deep water sources, shale deposits, polar reserves and natural gas energy. Half of our remaining supplies are in the volatile Middle East, with Saudi Arabia having the largest reserves (261 billion barrels).

Campbell says in a 2002 interview with Ruppert, "Probable actual physical shortage of all liquid hydrocarbons worldwide won't appear for about 20 years, especially if deepening recession holds down demand. But people are coming to appreciate that peak is imminent and what it means. Some places like the U.S. will face shortage sooner than others. The price is likely to soar as shortage looms, which itself may delay peak."

Richard Heinberg, author of PowerDown: Options and Actions for a Post-Carbon World and editor of the MuseLetter, thinks civilization is reaching a crossroads that will end the long-time domination of fossil fuels. He argues that the peak of oil production will be reached as early as 2010 or 2015.

The notion of a coming oil peak has reached the mainstream. In a front-page essay entitled "The End of Cheap Oil," National Geographic wrote, "…[S]laking the world's oil thirst is harder than it used to be. The old sources can't be counted on anymore. On land the lower 48 states of the U.S. are tapped out, producing less than half the oil they did at their peak in 1970. Production from the North Slope of Alaska and the North Sea of Europe, burgeoning oil regions 20 years ago, is in decline. Unrest in Venezuela and Nigeria threatens the flow of oil. The Middle East remains the mother lode of crude, but war and instability underscore the perils of depending on that region.

"And so oil companies are searching for new supplies and braving high costs, both human and economic….[T]hey are still finding oil in quantities to gladden a Hummer owner's heart. But in the end the quest for more cheap oil will prove a losing game: Not just because oil consumption imposes severe costs on the environment, health, and taxpayers, but also because the world's oil addiction is hastening a day of reckoning.

"Humanity's way of life is on a collision course with geology—with the stark fact that the Earth holds a finite supply of oil. The flood of crude from fields around the world will ultimately top out, then dwindle. It could be five years from now or 30: No one knows for sure, and geologists and economists are embroiled in debate about just when the 'oil peak' will be upon us. But few doubt that it is coming. 'In our lifetime,' says economist Robert K. Kaufmann of Boston University, who is 46, 'we will have to deal with a peak in the supply of cheap oil.'"

The significance of peak oil is widely debated. We're producing 75 million barrels a day now, and have either one trillion barrels left (Campbell), or two trillion, according to more optimistic sources such as the American Petroleum Institute. Many geologists say that because of a constant flood of new discoveries we're nowhere near running out of oil. Others point out that we've had Cassandra warnings before, including talk of peak oil in the 1970s. But even some former Bush advisors, like Matthew Simmons, see it coming. "The event will occur, and my analysis is…that peaking is at hand, not years away," he said. Whatever your perspective, it's plain that the current spiral of ever-increasing oil consumption and fast-growing car populations (especially in Asia) is not even vaguely sustainable. So if we can't do anything about supply, we may have to reduce demand.

The U.S. today is in intense denial about energy consumption and its implications for global warming. As we build ever-larger homes and gas up our Hummers, we're oblivious to the damage we're causing.

As Jeremy Rifkin points out in his new book The European Dream (which will be excerpted in the March/April issue of E), they're much more worried in Europe. The British government, for instance, is launching two technology incubators specifically aimed at climate change, one to deal with fuel cells, hybrids and other clean designs, and the other to use advanced technology (what's called "telematics") to reduce road congestion and emissions. Further, the European Union has committed itself to building a hydrogen-based energy economy by 2050, with renewable energy as the cornerstone.

A group of international automakers worked with the UN to produce a 2002 report that looked seriously at a sustainable future for the industry. At that time, the world produced 58 million cars and trucks per year, with the Chinese auto industry (its growth reinforced by bicycle bans in some areas) already experiencing 14 percent annual growth. And China was surpassed by 47 percent growth in Thailand, Indonesia, Malaysia and the Philippines. Clearly, the world is ill equipped, both in terms of oil production and generation of greenhouse gases, to handle that kind of automotive population explosion.

There were 531 million passenger cars worldwide in 2002, and there will likely be more than a billion by 2020. In the European Union, thanks to strong tailpipe laws, emissions are expected to decrease 85 percent from 1990 levels by 2020. Most European countries are also doing quite a lot to reduce car ownership and travel, by building impressive public transit networks, imposing heavy taxes on new cars (as in Denmark) and creating "car-free" zones in the central cities.

European cities also use electronically aided car-sharing networks, and are integrating telematics to increase the efficiency of park-and-ride programs (by providing very accurate, updated train and bus schedules, for instance).

Heinberg and Campbell would probably say this is all too little, too late. We can slow the runaway train down, but not make it stop. I'd like to think we still have a few more cards to play.

Peak Oil and the Extinction of Humanity

The follow arrived in my email today with all the looks of virus generated spam. I don’t know if it was, but it is an interesting message, and if viral spam, it is unusual in its content.
MK

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This non-commercial email is being distributed as a public service.
Peak Oil and the Extinction of Humanity
Summary
Global conventional oil production peaked in 2000 and has remained about level since then. We are at the top of the "bell curve" for global oil production. It is expected that we will start sliding down the back side of the bell curve starting about 2008. The decline in oil production will be precipitous and humanity is about to go over a cliff. By 2025, global oil production is predicted to be reduced by about 50%.
We will know all of this for certain when we have the benefit of 20/20 hindsight. However, oil experts are shouting from the rooftops now, if anyone will listen. Do an Internet search for "peak oil" or "oil production peak" and see for yourself.
Unless alternative sources of energy such as wind, solar and geothermal are developed very soon, it will not be possible to develop them at all because production and transportation at this time depend on oil. If we continue on our present course, the human population on the planet will experience a significant die-off while oil production falls.
Biologists looking at parallels in nature and human history suggest that there is a balance between populations and their energy base. When the population exceeds their energy base, the population will decline until balance is restored. For humanity without oil and without a replacement for oil, the decline in population may be about 90%, though total extinction is a real possibility.
The only hope for the bulk of mankind to survive is to develop alternatives to oil now, before oil begins its decline. As a fuel for cars, compressed air is a practical possibility. A car is being developed in France that can go 300 kilometers (180 miles) on a tank of compressed air. It takes only $2 of electricity to fill the tank. The car has an onboard air compressor, so all you need to do is plug in the car each night and you can drive all day. Alternatively, "filling stations" can offer a quick recharge from large compressed air tanks.
Heat for homes and electricity for the power grid can be provided wind, solar and geothermal. All of these can be applied on a small scale to generate heat and power for homes and businesses. The enormous amount of energy needed for national electrical grids can be supplied cost-effectively by large wind turbines. The installation of millions of wind turbines around the world could replace the loss of energy from the decline in hydrocarbons Variations in the amount of wind in local areas can be offset by having grid-connected wind turbines widely distributed, so that the amount of wind averages out. By this means, wind becomes a reliable source of electrical power.
As oil production falls and global consumption continues to climb, oil prices will rise. Who knows how high the price will go? It will be bid up internationally. Everything that depends on oil will also go up in price. Anyone who wants to implement alternatives to oil would be well advised to do it soon, while the price of oil is affordable. If we wait, not only will the cost be higher, but the money available will be less because the global economy will begin to contract, unemployment will soar, and government revenues will decline. By some estimates, demand for oil will exceed supply starting about the middle of 2005.
It would be good for those who can see what is happening to let others know. Only collective action now can save the situation.
The Details
The United States has 5% of the world's population and uses 25% of the world's oil. China's oil consumption (7.6% of global consumption) has now passed Japan (7.4%), making China the world's #2 oil consuming nation. Oil consumption is increasing in all areas of the world, but the increase is most rapid in the developing countries. World oil demand since 1988 has increased 25%, from 65 million barrels per day (b/d) to 82 million b/d. In these sixteen years, European consumption is up 16%, US consumption up 18%, Japan's up 25%, and China's up 175%.
There are insufficient hydrocarbons in the world for the entire population of the world to rise to the American level of consumption. World oil production per capita peaked in 1979 and has been declining since then. Given rising global demand for hydrocarbons, it is possible that demand may exceed supply within the next few years, perhaps as soon as 2005.
In 1956, Mr. King Hubbert predicted U.S. oil production would peak in the early 1970s. Hubbert was widely criticized by oil experts and economists, but in 1971 Hubbert's prediction came true. U.S. oil production has declined 40% since 1971. Hubbert's methods of oil reserve analysis predict that a peak in world oil production is occurring now. At the same time, global demand for oil is growing rapidly. Shortages and rising prices are inevitable. Even a global recession would only postpone the approaching shortage of oil.
In 1995, Petroconsultants Pty. Ltd., a respected oil industry consulting firm, released a report called, "World Oil Supply 1930-2050". This report cost $32,000 per copy and predicted global oil production would peak around the year 2000 and decline 50% by 2025.
In fact, worldwide conventional oil production did peak in 2000. We are on a bumpy plateau the top of the bell curve for global oil production. People will become more aware of this when we start to slide down the far side of the bell curve.
One of the reasons oil production will decline precipitously is because the size of oil reserves around the world have been overestimated. The "value" of oil companies is directly related to the size of their reserves, so there is an advantage to them to manipulate these estimates. OPEC countries have an agreement that limits their export quotas of oil in proportion to their reserves, so they also have an incentive to inflate their reserve estimates. Plus, there is a big difference between total reserves in the ground and reserves that may be ultimately recoverable.
Oil initially is very easy to extract because it is under pressure and flows to the surface automatically. However, as the oil flows, the pressure is reduced and the oil becomes increasingly difficult to extract. When oil is first pumped from a well, it can take the energy of one barrel of oil to get 100 barrels of oil from the ground. This is called the Energy Profit Ratio (EPR). Today on average it takes the energy of one barrel of oil to get ten barrels of oil from the ground. When it takes the energy of one barrel of oil to get one barrel of oil from the ground then the Energy Profit is zero and there ceases to be any benefit from the activity. (When the Energy Profit Ratio is 1/1 = 1, then the Energy Profit is zero.) According to a Swedish study done by a team from the University of Uppsala, ultimately recoverable world oil reserves are 80% less than previously thought
When examining alternatives to conventional oil, it is important to think not just in terms of money, but in terms of energy in versus energy out. Canada's tar sands, for example, require 7 to 8 barrels of water plus the energy of two barrels of oil to obtain three barrels of oil (the water ends up polluted in holding ponds that may eventually be as large as Lake Ontario). Coal is experiencing declining efficiency as a source of energy. At one time coal had an EPR of over 50, but has since fallen to an EPR of 8. The EPR of coal is expected to turn negative by 2030. Coal, natural gas and uranium have their own "Hubbert" curves. Nuclear energy is surprisingly inefficient when you include ALL the costs associated with nuclear power plants. The Energy Profit of nuclear energy is barely above zero. Costs often ignored when considering nuclear power include: radiation, accidents, production of bomb material, vulnerability to terrorist attacks, no liability insurance, and storage of radioactive waste for many thousands of years
There is not enough natural gas in North America to supply all the gas powered electrical generating plants presently on the drawing boards. Natural gas production in U.S. and Canada has peaked and is declining in both countries. If your home is heated by natural gas, you might want to start looking for an alternative because no one can guarantee the supply of natural gas. We suggest that each homeowner consider installing a ground source heat pump to heat and cool the home.
Sources of the world's energy:
Oil...................40%
Natural Gas...23%
Coal...............23%
Hydro...............7%
Nuclear............6%
Other................1%
Total.............100%
The above list clearly shows the world's dependency on hydrocarbons (oil, natural gas, coal). Everyone knows that hydrocarbons are a finite resource and will run out one day. However, the general belief is that we have at least two or three decades before this event happens. The surprise is that on a planetary scale conventional oil is peaking NOW, and that problems begin NOW when production levels off and then starts to decline. The growth of the world economy needs energy, and if oil is peaking then the energy to grow can no longer come from oil. Unless alternatives to oil are found and developed, the world economy will stall and then contract in step with declining oil supplies. In truth, the population of the planet is faced with an emergency unlike any world war or plague or other disaster in its experience. We can fight like rats over a declining resource until no oil and no people are left, or we can work together on a planetary scale to usher in a new post-hydrocarbon era of peace and prosperity for all.
How a Population Goes Extinct
"A population that grows in response to abundant but finite resources, tends to exhaust these resources completely. By the time individuals discover remaining resources will not be adequate for the next generation, the next generation has already been born. And in its struggle to survive, the last generation uses up every scrap, so that nothing remains that would sustain even a small population." - Dr. David Price
In the above list, the tiny 1% of total energy from "other" highlights the complacency of many nations, but things are changing. Denmark now gets 21% of its electricity from wind. Germany began a rapid development of renewable energy 12 years ago. Iceland is working to eliminate oil imports. The Canadian province of Prince Edward Island gets 5% of its electricity from wind and other renewables, and is planning to increase this to 100% by 2015.
There are those who would take a "wait and see" attitude before taking action. This is a formula for disaster, because oil is needed for all production, including the production of wind turbines, solar cells and other potential alternatives to oil. Delay makes the transition increasingly difficult. The actual peak for oil production will be known for certain after the fact. Politicians who wait for this certainty are gambling with the lives of their people and deserve to starve and freeze in the dark with them. Why would anyone want to take this risk? For the people of each country, there is no downside from beginning to create a post-hydrocarbon era now.
Even for the big oil companies, there is no longer any risk of loss by the development of competing sources of energy. The oil companies have sold their oil and made their profits. Their industry is now beginning its inevitable decline. Watch the newspapers and you will see that the oil companies are already beginning to consolidate and sell their assets. Employment in the oil industry has declined from about 1.6 million people to just over 600,000 in the last 20 years. The number of operating drilling rigs has dropped by half during that time. Since 2001, oil companies have spent more money exploring for oil than they have earned in new oil discovered.
Energy Source Energy Profit Ratio (EPR)
Ethanol..................................Below 1
Nuclear..........Slightly greater than 1
Oil from tar sands............................1.5
Liquid Natural Gas (LNG)...............2
Coal with scrubbers........................2.5
Ground source heat pump..............3
Thermal Depolymerization.............6.66
Coal..................................................8
Conventional Oil...........................10
Natural Gas...................................10
Hydro electricity............................11
Solar (photovoltaic)......................15
Wind...............................................50
Newer solar devices such as thin film panels and concentrating systems can have an Energy Profit Ratio as high as 15. Large wind turbines can have an EPR as high as 50. Given that the EPR of wind and solar is so much higher than the EPR of oil or coal, it makes more sense to invest available resources in wind and solar rather than exploring for more oil or digging out more coal. The best location for solar is in deserts, both because the amount of sunshine is maximum and also because the land is not otherwise being used for agriculture. Solar roofs are also a productive use of space, generating both electricity and hot water.
Wind energy is cheaper than electricity generated by coal or nuclear energy. Due to recent price increases for natural gas, wind power is now competitive with electricity generated by natural gas.
Wind turbines generate electricity only when the wind is blowing. By connecting wind turbines to the electrical grid, fluctuations in the amount of wind in local areas averages out. By this means, wind becomes a reliable source of energy.
"Maps of European wind conditions reveal that the continent's present electric power consumption could be supplied 100-fold with onshore installations alone; offshore installations add enormous additional capacity...By 2003 the installed capacity already reached 39 GW." - Rudolf Rechsteiner (Swiss MP)
Replacing oil will require a mix of alternatives. Europeans use half the energy per capita compared to North Americans, for a comparable standard of living. This illustrates the potential for energy conservation in North America. Vehicles can be propelled by compressed air, batteries, hydrogen, etc. However, this choice will be made by the end user. The main task at hand is to develop a primary source of energy. Compressed air, batteries, and hydrogen are energy carriers or storage devices, they are not a source of energy. Wind power, solar power, and geothermal energy are primary sources of energy.
The Gap
As oil supplies fall and demand rises, there will be a steadily growing gap between supply and demand that must be filled by alternatives if the global economy is to avoid collapse.
"By some estimates, there will be an average of two percent annual growth in global oil demand over the years ahead, along with, conservatively, a three percent natural decline in production from existing reserves." - Dick Cheney, 1999.
"Under the best of circumstances, if all prayers are answered there will be no crisis for maybe two years. After that it's a certainty." - D. Matthew Simmons, Energy Advisor to George W. Bush, August 2003.
Some experts are predicting that the first half of this century will be characterized by "resource wars" as nations fight over declining oil supplies. If you deduct the energy cost of resource wars from the already low Energy Profit Ratio (EPR) of oil, it is readily apparent that these wars would be a waste of energy. If you calculate the number of wind turbines each country needs based on Dick Cheney's estimates (3% decline of oil production per annum plus 2% for growth) or the estimate by Petroconsultants Pty. Ltd. of a 50% reduction in oil production by 2025, you will readily see that every available scrap of energy needs to be invested in energy conservation and wind turbines if people and the economy are to survive.
Wind energy offers:
- quick construction (2 - 20 weeks), global availability
- low capital cost (cheaper capital cost than coal or nuclear per kilowatt hour of electricity produced)
- winter and summer production peaks (depending on location)
- no emissions, no disposal costs (compare to nuclear), no fuel required
- steadily falling costs due to mass production and more efficient installation
- wind generated electricity is immune to oil and gas price fluctuations
- there is enough wind to supply ALL energy requirements many times over everywhere in the world.
Wind power in the last six years has maintained a yearly growth rate of 26 percent and is the fastest growing electrical generation technology worldwide.
The economic benefits from becoming self-sufficient for energy are substantial. Why import oil and send the nation's wealth overseas when all the energy needed is readily available at home? Development of wind energy creates five times more jobs than an equal investment in nuclear energy. A new profession of skilled workers retrofitting homes and businesses for energy independence and increased energy efficiency would create many thousands of jobs that could not be easily "outsourced" to China or India. Becoming self-sufficient for energy will make the economy less vulnerable to disruptions in oil supply and allow the nation to abstain from "oil wars". Widely distributed energy supplies give the economy resilience in the face of adverse weather, terrorist attacks, and other disruptions. Increased efficiency in business and industry would make the economy more competitive internationally.
Given time to adapt, we can collectively respond to any challenge. Delays in starting adaptation to a post-petroleum world will make the transition increasingly more difficult. If you wait until oil runs short, EVERYTHING will cost more, including alternative sources of energy, because at the present time everything is made and transported with petrochemicals. This means that "market signals" in the form of rapidly rising oil prices and shortages will come too late. If you want to build a post-petroleum economy you need to do it while there is still enough oil. This means NOW. In a sense, the ability of humanity to develop a post-petroleum economy before oil runs out is a test of its intelligence, and those who fail will not survive.
Hydrogen vs.Compressed Air
Many people believe that the fuel of the future is hydrogen. Certainly hydrogen will play a role. However, we believe the fuel of the future is air.
Look at the inefficiencies involved with hydrogen. Electrolysis of water to produce hydrogen and oxygen is about 75% efficient. So there is an initial loss of 25% of the energy input.
A gas turbine or fuel cell is about 30% to 40% efficient at converting the hydrogen back into electricity. So at best you have lost 60% of the remaining energy.
Plus the hydrogen is a very light gas and must be highly compressed or cooled and liquefied before it can be used as a fuel for automobiles and other vehicles. Given that the gas is going to be compressed anyway, why not use compression as the store of energy and forget about all the previous steps? Compressed air is an excellent store of energy and compressed air engines are very efficient and economical to build and operate.
Compressed air can be used as fuel for vehicles, and can also power a generator to provide electricity for homes and businesses.
For more information, do an Internet search for "compressed air engine", "compressed air car", etc.
It is entirely possible for each home to become self-sufficient for energy Installation of a ground source heat pump costs about $15,000 and can provide all the heating and cooling the home requires. A small wind turbine and solar panels, plus batteries and an inverter can provide all the electricity a home requires for a total cost of about $15,000. When the compressed air car becomes available, it can be recharged at night by plugging into the house power. The car's onboard air compressor will recharge the compressed air tank. The cost of the car is expected to be less than $15,000. So for about $45,000 each home can get along just fine without oil. It is not necessary to go to war for oil, nor is it necessary to bankrupt the country or for the population to die off.
The above cost could be reduced by each community installing large, efficient wind turbines to generate all the electricity the community requires. The electricity grid would provide back-up power for the community. Then each homeowner and business would be responsible only for heating/cooling and transportation.
"I would therefore like to address the men and women of America: You belong to the most powerful nation on Earth, an immensely wealthy country, populated by people who want to live their lives with compassion and integrity You have a great and noble task ahead of you. Each of you can be as powerful as the most powerful person who ever lived. If you or your child were threatened with a lethal disease, you would do everything in your power to save that life. This is the analogy that you must now apply to the planet and in particular to your country. America must rise to its full moral and spiritual height to reach its intended destiny - the nation that saved the world." - Helen Caldicott
"There is no additional supply." - OPEC President Purnomo Yusgiantoro, August 3, 2004.
"All great crises were ignored until it became too late to do anything about it." - Matthew Simmons
For more information do an Internet search for "peak oil" or "oil production peak". There are also many books available on the subject.
This non-commercial, non-partisan email is being distributed as a public service to alert humanity to the coming oil crisis and the need for action NOW if disaster is to be averted. Please pass this information on to others in order to stimulate informed discussion and action. This issue affects the peoples of all nations, cultures, religions, and races. We are in this together and constructive action everywhere in the world is the best solution.
Questions and comments may be sent to the author:
Stephen Porter
17-7000 McLeod Road
Suite #306
Niagara Falls, Ontario L2G 7V7
Canada
sporter@beaconflash.com

Taking a peak: Concern over world's oil supply fuels discussion over alternatives, technology

BostonHerald.com

Enjoy the ride up ``Hubbert's peak.''

The descent might not be so fun.

After a 34 percent spike in the price of crude oil this past year, many industry experts and economists are wondering whether something larger was at play during 2004 - such as the early signs of the ``Hubbert's peak'' theory coming true.

Named after a scientist who correctly predicted that U.S. domestic oil production would peak in the 1970s, others are now worried the entire world oil production could hit its own ``Hubbert's peak'' in 10 to 20 years, with possible dire consequences for the global economy.

No one is predicting oil will run out.

But, under the theory, oil supplies will start to decline while demand keeps going up, forcing possibly wrenching energy price hikes and shortages - in turn affecting every facet of life, from the type of cars we drive to how electricity is produced.

Like last June's record $2.10 per gallon of gasoline in Massachusetts? Think of an easy $10 - or higher - if or when ``Hubbert's peak'' is reached.

Same applies to heating oil, which also hit a seasonal record of more than $2 a gallon this past fall in Massachusetts. Ditto for natural gas costs, whose prices closely track the oil markets.

``We're going to have to shift to a new type of paradigm,'' said Gary Taylor, a principle at the Hub-based Brattle Group, an economic consulting firm.

Taylor generally believes in the ``Hubbert's peak'' model that says the world is approaching the maximum amount of oil it can squeeze out of Mother Nature, though he cautions there's wide dispute about when the peak might hit.

There's generally thought to be about 3 trillion barrels of oil underneath the earth's surface - a trillion of which is in so-called ``pre-reserves,'' or oil fields proven to exist and just ready to be tapped.

But, as Taylor notes, not everyone believes in ``Hubbert's peak.''

``We're not going to hit a brick wall,'' said Ron Planting, an analyst at the American Petroleum Institute, an industry group.

He noted that the ``pre-reserves'' of 1 trillion barrels are, at today's world oil consumption rate, enough to last 35 years.

ranted, demand will keep going up - thanks largely to booming economies in such developing nations as China and India, he said.

But new technologies - such as being able to squeeze more oil out of fields, tar sands and shale, for instance - will also improve and become more cost-effective, he said.

``As the technologies change, the possibilities change,'' said Planting.

But Seth Kaplan, a senior attorney at the Conservation Law Foundation, said all the economic models miss one thing: the impact of fossil fuels on the environment, particularly global warming that many believe is caused by carbon dioxides spewing from cars and industrial plants.

``There are real issues to grapple with,'' he said.

Part of the solution: Developing and employing alternative energy sources - from wind power to solar power to promising hydrogren fuel cells, he said.

``There's no single magic bullet,'' he said. But policymakers need to start putting together ``all the pieces of the puzzle'' to avoid both economic and environmental diasters, he said.

Hold on, says Jerry Taylor, director of natural resources studies at the Cato Institute, a free-market, libertarian institute.
Taylor, no relation to the Brattle's Taylor, said he happens to believe that global warming is partly caused by industry pollutants, though not to the extent that many scientists believe.

He criticized the ``Hubbert's peak'' theory as unreliable and overused. ``We don't know enough about the globe's oil fields,'' he said. ``There's a lot undiscovered.''

The answer to problems, he said, is to let market forces discover any solutions, without intrusive government policies that could be based on faulty assumptions.

The Dodge Neon car - using advanced internal cumbustion engine technology - now gets 50 miles per gallon.
``But nobody drives them,'' he said.

The same applies to hybrid cars that use battery and gas power: They're not popular enough with the public, he said.
On that score, a number of engineers and entrepreneurs are working on advanced engine technologies that would allow automakers to essentially have their cake and eat it, too.

The concept: Improve efficiency enough so that Detroit can still manufacture its most popular models - sport utility vehicles - while at the same time eschewing their gas-guzzling reputation.

Either way, Taylor says, the key is to allow technological improvements - and then let people determine when it's in their economic interests to switch. Society, he says, has a way of adapting.

The 19th century's dominant fuels were wood, whale oil and coal, he said. The 20th century was dominated by fossil fuels and, to an extent, nuclear fuel.

``Nobody can say what will happen'' in the 21st century, he said.

But David Kelly, an economic adviser to Boston's Putnam Investments, said some type of long-term national energy policy is needed. An energy tax to help ``wean people off'' fossil fuels might help make new technologies more economically competitive, he said.

``The age of cheap oil is behind us,'' he said. ``Much depends on what we decide needs to be done.''

Hostage to oil - World supply is so precious that more price spikes are inevitable

USNews.com

"I can't tell you we won't see $20 oil again, but I also wouldn't be surprised to see $70 oil," says analyst Bill O'Grady of A. G. Edwards & Sons. It's nearly impossible to forecast, he says, "because the structure of the market has profoundly changed."

A few pessimistic observers say the world is simply running out of oil and is paying the price for its dependence on a finite resource. But most analysts see a more complicated reality: The supply is still there, but it is increasingly difficult to access and deliver to ever more oil-hungry consumers around the globe. It is a world where new demand for oil, led by China and India, is growing at a record clip, while threatened or unreliable regimes like Saudi Arabia and Iran control the largest share of petroleum reserves. Meanwhile, investors have entered the oil futures market in a big way, causing rapid price spikes as they seek out hefty returns. "We're not running out of oil in the ground," says James Burkhard, director of market research for consulting firm Cambridge Energy Research Associates. "But aboveground political, environmental, and economic trends will shape the future of oil prices."

In the view of the Bush administration, terrorism and political risks have conspired--with the help of speculators--to create a "terror premium," jacking up prices $10 to $12 above what they would be otherwise. "It is a rare coincidence that you have volatility in so many diverse places," reasons one administration official involved in energy issues. "At any moment, we're just one labor strike away from a price hike" (story, Page 50).

But far more is at work in the market than a temporary imbalance produced by the Iraq war or terrorism. A few dire forecasters say the world is nearing "Hubbert's Peak," named for the late geologist M. King Hubbert, who accurately predicted that oil production in the United States would reach its apex around 1970 and decline ever afterward. Although Hubbert's call that worldwide production would peak between 1995 and 2000 has not panned out, a cadre of "peak-oil theorists" maintain that his calculation was essentially sound. The day of reckoning has simply been delayed, they say, and may be at hand.

 "The first message American consumers need to hear," says A. G. Edwards's O'Grady, "[is] if you think the price of oil and gasoline has been volatile, you ain't seen nothin' yet."

Why We Need Alternatives to Oil

EV World

If you use the US Geological Survey's estimate of world oil reserves of 649 billion barrels of oil, and apply Hubbert's formulae, world oil production will peaking around 2022.

Many people think that the US Geological Survey's numbers are greatly inflated. In his book "Hubbert's Peak", Professor Kenneth S. Deffeyes of Princeton University predicts that the peak for world oil production will be reached by 2006 or 2007. Many others believe we have already reached Hubbert's peak.

There is supporting evidence that oil is, indeed, reaching its peak. In March 2004 Shell oil cut its estimated oil reserves for the second time in three months. The Saudi oil fields, which supposedly have the world's largest proven reserves of crude oil, are also showing signs of aging. Water has been seen mixed with the oil; a sure sign that the field is past its prime. Companies have had to start drilling horizontally instead of vertically which increases the cost of oil production.

Some businesses are starting to recognize the significance of 'Hubbert's Peak'. This is a screen capture of a Powerpoint slide that was part of a presentation by Scania Trucks at the 2004 Tokyo Autoshow.

Hubbert's Peak should concern us all, but there is a much more pressing problem that should be driving us to cut our dependence on foreign oil. I am talking about political instability in Saudi Arabia.