Peak Oil News: 06/01/2004 - 07/01/2004

Tuesday, June 29, 2004

The Peak in U.S. Coal Production

From The Wilderness

As many people with even a casual interest in energy now know, natural gas supplies in the United States are very tight and will most likely become worse due to mature gas reservoirs no longer being able to meet demand. The National Petroleum Council (NPC), an industry organization established by the U.S. Interior Secretary in 1946, announced in a September 2003 report that U.S. and Canadian gas production has "plateaued" and that North America will no longer be self reliant in meeting its gas needs.1 There currently exists only one source of proposed salvation for meeting American gas demand, and that is importing Liquefied Natural Gas (LNG) from other countries such as Oman, Qatar, or Algeria. There is currently a large effort in this nation to rapidly increase LNG imports but safety and environmental concerns are greatly slowing down this effort. In addition, competition for LNG from Japan, Europe, India, and China may very well limit the amount we can ultimately obtain.

The oil situation may turn out to be just as bad, if not worse. Studies conducted by petroleum geologists such as Colin Campbell2 and L.F. Ivanhoe3 suggest that conventional oil production will peak sometime before 2010. While this claim was at first ignored by most mainstream media, it can't be ignored any longer. Petroleum prices have reached record highs; oil production has peaked in individual countries including the U.S., Britain, and perhaps Oman; and it's now commonly recognized that Saudi Arabia is the only country claiming excess production capacity. Ever-increasing numbers of former skeptics agree that oil production may peak during this decade.

We live in a world that was built and is sustained by inexpensive, readily available fossil fuels. Fossil energy powers our delivery vehicles and all of our farm machinery, it pumps water to our homes, it produces nearly all of the products that we call chemicals. In short, without fossil fuels our civilization cannot exist as we currently know it. Figure 1 shows the percentage of various energy sources used to run American civilization from 1920 to 2002. It can be easily seen that natural gas, petroleum, and coal make up the vast majority of American energy demand and that as petroleum and gas consumption have risen or fallen, coal has done the inverse. This is because coal is the only real alternative for gas and oil. Some might argue that there could be other sources of energy and they would be right but we are simply not ready for them.

Figure 1


Monday, June 28, 2004

The End of Oil

MotherJones.com

Oil, besides being a whole lot of political trouble, is approaching its production peak. What to do?

Not since the OPEC embargo of the 1970s have Americans been forced to take such a hard look at the nation’s reliance on oil, particularly the Middle Eastern variety. With gas selling at more than $2 a gallon, and a barrel of oil trading at $40 or more, the U.S. economy is feeling the pain at every level. And of course, the need to secure a reliable supply of oil from the Middle East explains, in large part, the presence of U.S. troops in Iraq.

Now comes Paul Roberts to tell us in his new book, The End of Oil, that crude, besides being at the core of a host of political and economic problems, is getting harder to find, both in the Middle East and (especially) outside it -- meaning that high prices are here to stay, and that the United States can expect to become more, not less, dependent for its oil on volatile Middle Eastern countries.

Roberts says that Americans are “energy illiterate” -- we only think about the nation’s energy policy when oil prices hit us hard in the pocket. If the high price of oil keeps up, it may be just be the rude awakening needed for us to pressure politicians and in turn, the energy industry, to undertake massive investment in the alternatives to oil. If we don’t, the consequences will be disastrous: economic recession, environmental devastation, and further upheaval in the Middle East.

Roberts sat down with MotherJones.com to talk about the oil economy, the viability of alternative energy sources, and how the price of oil might play out as an election issue this year.

Click link to read interview with Paul Roberts


The Undeclared Oil War

washingtonpost.com

[W]e are on the cusp of a new kind of war -- between those who have enough energy and those who do not but are increasingly willing to go out and get it. While nations have always competed for oil, it seems more and more likely that the race for a piece of the last big reserves of oil and natural gas will be the dominant geopolitical theme of the 21st century.

Already we can see the outlines. China and Japan are scrapping over Siberia. In the Caspian Sea region, European, Russian, Chinese and American governments and oil companies are battling for a stake in the big oil fields of Kazakhstan and Azerbaijan. In Africa, the United States is building a network of military bases and diplomatic missions whose main goal is to protect American access to oilfields in volatile places such as Nigeria, Cameroon, Chad and tiny Sao Tome -- and, as important, to deny that access to China and other thirsty superpowers.

The diplomatic tussles only hint at what we'll see in the Middle East, where most of the world's remaining oil lies. For all the talk of big new oil discoveries in Russia and Africa -- and of how this gush of crude will "free" America and other big importers from the machinations of OPEC -- the geological facts speak otherwise. Even with the new Russian and African oil, worldwide oil production outside the Middle East is barely keeping pace with demand.


Saturday, June 26, 2004

Fahrenheit 9/11

(I try to keep this blog political free. Here is an exception.)

We saw this movie this afternoon - Fahrenheit 9/11.
 
Whatever your political persuasion, see this movie.
 
If you have been paying attention to the details of the news over the past few years, not what you hear on TV, but the details you have to dig up in the back pages of the papers and magazines, there will be no big surprises, but some of the disjointed stories will come together with clarity.
 
If you have been watching the TV headline news, you are in for some surprises.
 
What this movie makes abundantly clear is that our country has been hijacked. We the people have been duped in an unbelievably colossal way.
 
If you know yourself to be a patriot, you MUST see this movie. Our flag and country have been stolen by a very powerful and extremely rich elite that exists far beyond imagination.
 
I wish there were a better alternative to Bush than Kerry, but I assure you there will be no way I could ever support Bush. The corruption of him and his family is almost beyond comprehension.
 
America is a great country. We have the brains, resources and technology to be fantastic - all of us, not just a few "leaders" on top. Somehow we the people have to get our country back.


Friday, June 25, 2004

Oil: How Bad Do You Want It? George Will

washingtonpost.com

In 1977 President Carter said we "could use up all the proven reserves of oil in the entire world by the end of the next decade." But today known reserves are larger than ever. Reserves and production outside the Middle East are larger than they were 31 years ago, when a State Department report was titled "The Oil Crisis: This Time the Wolf is Here."

In 1971, a year before Texas output passed its peak, U.S. production met more than two-thirds of the nation's needs. Today the nation imports 54 percent of the oil it uses. M.A. Adelman of Massachusetts Institute of Technology notes that in 1971 non-OPEC countries had about 200 billion barrels of proven reserves. In the next 33 years they produced 460 billion "and now have 209 billion 'remaining.' " Note Adelman's quotation marks. To predict actual reserves would require predicting future exploration and development technologies.

However, the rate of discovery has been declining for several decades. Of course, oil supplies are, as some people say with a sense of profound discovery, "finite." But that distinguishes oil not at all from land, water or pistachio nuts.

Russell Roberts, an economist, says: Imagine that you love pistachio nuts and are given a room filled 5 feet deep with them. But you must eat them in the room and must leave the shells. When will you have eaten them all? Never. Because as it becomes increasingly difficult to find nuts amidst the shells, the cost of the nuts, in time and effort, will become too high. You will seek a substitute -- pistachios from a store, or another snack.


(The assumption is the market and technology will respond with a solution. This often works, but it is not a certainty. There is a market for cures for obesity, cancer, AIDS, and the common cold, but these problems persist.)


Thursday, June 24, 2004

"Oil" Author Will Speak Tonight - CU Boulder, Colorado

Colorado Daily

The 100-year reign of the world's oil-based economy is nearing its zenith, according to an author who will speak at CU-Boulder tonight.

Paul Roberts, author of "The End of Oil: On the Edge of a Perilous New World," will lecture tonight from 5:30 - 7:00 at Old Main Chapel in a free public lecture.

"We won't run out of oil tomorrow, or next week, but it will happen soon," Roberts said from Los Angeles on Tuesday.

Roberts said worldwide supplies of the world's easily extractable oil could peak and then decline within the next 10 years, but that timeline isn't set in stone.

The U.S. Geological Survey estimates that oil supplies will peak in 2035.


Wednesday, June 23, 2004

The Future Of Cheap Oil

The Joplin Globe - Online Edition

Oil produced the modern world — its ways of work, warfare and recreation — and soon, we are told, the end of cheap oil will produce abrupt, wrenching changes in the way we live. Changes, certainly, but not convulsions, because the modern world responds to price signals. 

That is why U.S. energy efficiency — energy consumed to produce a dollar of GDP — has roughly doubled since the oil shocks of the 1970s. America’s less than 5 percent of the world population consumes more than 20 percent of all oil. Surging demand by India and especially China will cause prices to rise. And terrorists, or chaos in Venezuela — America’s fourth-largest supplier, behind Canada, Saudi Arabia and Mexico — or Nigeria, the fifth-largest, could cause prices to soar.

However, in 1920 the inflation-adjusted price of gasoline was twice today’s. To match 1981 prices, a gallon of gasoline today would have to be $3.50. Inexpensive gasoline is one reason why since 1988 the average gas mileage of U.S. passenger vehicles has declined, and why in the 2003 model year, for the first time since the mid-1970s, the average weight of a new car or light truck was more than two tons (4,021 pounds).

In 1977 President Carter said we “could use up all the proven reserves of oil in the entire world by the end of the next decade.” But today known reserves are larger than ever. Reserves and production outside the Middle East are larger than they were 31 years ago, when a State Department report was titled “The Oil Crisis: This Time the Wolf is Here.”

In 1971, a year before Texas output passed its peak, U.S. production was more than two-thirds of the nation’s needs. Today the nation imports 54 percent of the oil it uses. M.A. Adelman of MIT notes that in 1971 non-OPEC countries had about 200 billion barrels of proven reserves. In the next 33 years they produced 460 billion “and now have 209 billion ‘remaining.’” Note Adelman’s quotation marks. To predict actual reserves would require predicting future exploration and development technologies.

However, the rate of discovery has been declining for several decades. Of course, oil supplies are, as some people say with a sense of profound discovery, “finite.”


Tight U.S. Fuel Stockpiles a Concern - Energy Dept.

Reuters.com

U.S. fuel stockpiles are languishing well below average, leaving the world's largest energy consumer vulnerable to a summer gasoline inventory crunch or tight supplies of heating oil next winter, the Department of Energy said on Wednesday.

The tightening inventories of fuel come even as U.S. supplies of crude oil -- the feedstock refiners use to make gasoline, diesel and other refined products -- swell toward the middle of the average range, thanks in part to an OPEC decision to increase exports to the world market.

"The bad news is that product inventories are not faring as well as crude oil inventories, and with little spare refining capacity available, it may take increased refined product imports to improve this situation," the DOE said in a weekly report.


Monday, June 21, 2004

Oil, and defining 'finite'

The Cincinnati Post

Oil produced the modern world -- its ways of work, warfare and recreation -- and soon, we are told, the end of cheap oil will produce abrupt, wrenching changes in the way we live. Changes, certainly, but not convulsions, because the modern world responds to price signals.

That is why U.S. energy efficiency -- energy consumed to produce a dollar of GDP -- has roughly doubled since the oil shocks of the 1970s. America's less than 5 percent of the world population consumes more than 20 percent of all oil. Surging demand by India and especially China will cause prices to rise. And terrorists, or chaos in Venezuela -- America's fourth-largest supplier, behind Canada, Saudi Arabia and Mexico -- or Nigeria, the fifth-largest, could cause prices to soar.

However, in 1920 the inflation-adjusted price of gasoline was twice today's. To match 1981 prices, a gallon of gasoline today would have to be $3.50. Inexpensive gasoline is one reason why since 1988 the average gas mileage of U.S. passenger vehicles has declined, and why in the 2003 model year, for the first time since the mid-1970s, the average weight of a new car or light truck was more than two tons (4,021 pounds).

In 1977 President Carter said we "could use up all the proven reserves of oil in the entire world by the end of the next decade." But today known reserves are larger than ever. Reserves and production outside the Middle East are larger than they were 31 years ago, when a State Department report was titled "The Oil Crisis: This Time the Wolf is Here."

In 1971, a year before Texas output passed its peak, U.S. production was more than two-thirds of the nation's needs. Today the nation imports 54 percent of the oil it uses. M.A. Adelman of MIT notes that in 1971 non-OPEC countries had about 200 billion barrels of proven reserves. In the next 33 years they produced 460 billion "and now have 209 billion 'remaining.' " Note Adelman's quotation marks. To predict actual reserves would require predicting future exploration and development technologies.


However, the rate of discovery has been declining for several decades. Of course, oil supplies are, as some people say with a sense of profound discovery, "finite." But that distinguishes oil not at all from land, water or pistachio nuts.


Russell Roberts, an economist, says: Imagine that you love pistachio nuts and are given a room filled 5 feet deep with them. But you must eat them in the room and must leave the shells. When will you have eaten them all? Never. Because as it becomes increasingly difficult to find nuts amidst the shells, the cost of the nuts, in time and effort, will become too high. You will seek a substitute -- pistachios from a store, or another snack.

Oil over $40 a barrel accelerates exploration for new fields, and development of known but technologically inaccessible fields, including some fields four miles below the surface of the Gulf of Mexico, where there may be at least 25 billion barrels. High prices may also prompt development of hitherto economically unfeasible sources, such as U.S. oil shale and Canadian tar sands. Tim Appenzeller, writing in National Geographic, says tar-sand deposits in Alberta "hold the equivalent of more than 1.6 trillion barrels of oil -- an amount that may exceed the world's remaining reserves of ordinary crude." Alberta, a future Saudi Arabia? Perhaps. Full-throttle production of oil from tar sand is not economical. So far.

John Kerry, whose idea of the future extends only to Nov. 2, says we should use less oil, but gasoline should be cheaper, so President Bush should stop filling the Strategic Petroleum Reserve. But that is taking just 0.2 percent of the oil in the world market. Were Bush to stop topping off the reserve, as President Clinton did to help Al Gore's 2000 campaign, Kerry would accuse Bush of manipulating prices for political advantage.

The futures market is wagering that oil in summer 2005 will be about $35. The more distant future will be shaped by how much various nations have inflated estimates of their reserves. But, then, Alaska may have three times more reserves than originally estimated.

MIT's Adelman notes that even before 1800 -- before the coal-fired industrial revolution -- Europeans worried about exhausting coal supplies. "European production actually did peak in 1913 and is nearly negligible today." Billions of tons remain beneath European soil but are uneconomical to remove. So far.


'Fill 'er up' becomes the unlikely battle cry of Car Wars

STUFF : BUSINESS - STORY : New Zealand's leading news and information website

Now, you might assume governments will begin to act in the interests of consumers when oil supply fluctuations start to bite. After all, inflation's no good for anyone, is it? Perhaps. But there is also the possibility we're living through the early phases of something much bigger than just another temporary "crisis" and which history will record as a turning point.
And that's how we deal with the coming and predictable scarcity of fossil fuels.

You may have already heard of a thing called "Hubbert's peak". Hubbert was the geologist who (along with later analysts who revised his figures) more or less accurately predicted when global oil production would hit its maximum output – around 2006-2010. Once over this peak, with demand steadily outstripping supply, prices will inevitably climb. For a world obsessed with growth and globalisation, the potential consequences are dire – and a little harder to fix than by car pooling in the Auckland rush hour.


Saturday, June 19, 2004

World Running Out of Oil Surplus, Some Experts Warn

AXcess News - Oil & Gas News

For the past century most of the advances in transportation and industry have relied on energy from petroleum and other fossil fuels, but some experts warn that the peak of oil production worldwide may be reached soon and that the economic and political consequences could be enormous.

Is the world running out of oil? In the debate over that question between energy experts, environmentalists and government policy makers it often boils down to the old question about whether the glass is half full or half empty. The question is tricky because it involves not just the amount of oil potentially available beneath the earth's surface, but the difficulties, dangers and the expense of getting it out.


End of Oil

NPR : Fresh Air - Interview with author Paul Roberts

The demand for oil increases each year, but the supply is not inexhaustible. Experts predict that within 30 years our oil energy sources will be depleted. In his book, The End of Oil: On the Edge of a Perilous New World, Roberts looks at the implications for the world in terms of the economy, politics and the environment, and what alternatives exist for oil. Roberts writes about the energy industry for Harper's magazine and for other national publications.

Click to listen with Real Media


Paul Roberts is an excellent speaker - I highly recommend listening online, or if you can meet him on his book tour.


The Gas Planet

Willamette Week Online | Books | REVIEW

America has painted itself into a tight corner by basing its entire infrastructure on a finite energy source: oil.

Two new books consider the myopic governmental planning that has brought us to the lip of the proverbial gas hose. Paul Roberts' The End of Oil is an exhaustive study of modern energy production and politics, taking the reader from the dwindling wells of Saudi Arabia to the successful solar-powered German city of Freiberg, stopping en route to gasp at the idiocy that has dragged us into Iraq. David Goodstein's Out of Gas also shudders at the spectacle that is--in the writer's phrase--Oil War II, and warns that this is only the start of chaos unless we wean ourselves off petrochemicals.

Roberts plays journalist to Goodstein's academic. Roberts wanders through the blasted landscape outside of Baku, Azerbaijan, where a hoped-for oil bonanza never materialized, then heads to the world's largest wind-power farm, located outside of Walla Walla, Wash. Roberts reminds us that war in Iraq and coup attempts in Venezuela are related, as the Axis of Ethyl--Cheney, Rummy and Wolfie--have long made it a Neocon priority to topple OPEC and reinvent the oil colonialism of the early 20th century.

Goodstein dives into the history of energy production, detailing where we took wrong turns. A number of individuals stand out in the narrative, including Marion King Hubbert, a geophysicist working for Shell, who correctly predicted in 1956 that America's oil production would peak and then fall in the 1970s. Reaching further back into history, there's the story of Svante August Arrhenius, a Nobel Prize-winning Swedish scientist who in 1896 hypothesized that the burning of fossil fuels would lead to global warming.

Despite these differing approaches, both writers reach the same conclusion: Oil will disappear in this century, so we must take immediate action. Each makes grim prophesies for the future, yet both authors hold out hope that citizens can unite to try and effect change before it's too late.

Still, both warn that alternatives are still a ways away from readiness. Roberts reports encouraging results from bioreactors, including tubes of pond scum that can generate vast amounts of hydrogen, while Goodstein advocates a return to nuclear energy as a stop-gap before other sources are perfected.
Though their floorplans for the future vary slightly, writers Roberts and Goodstein agree that it's already rather late in the day. But if we don't take action, then we will get what we deserve: a boiling planet at war for resources.


Friday, June 18, 2004

Cheap oil now, high costs later

The Straits Times- JUNE 18, 2004

Cheap oil, of course, is always pleasant to have. According to a joint study by the International Energy Agency (IEA) and the secretariat of the Organisation for Economic Cooperation and Development (OECD), a sustained US$10 increase in the price of a barrel of oil, from US$25 to US$35, would shave at least 0.5 per cent from global gross domestic product growth. That would not cripple the global economy, but it might encourage energy efficiency.

And that is precisely what Saudi Arabia and other oil-producing countries don't want to see happen. Contrary to the supposition that Organisation of Petroleum Exporting Countries (Opec) countries prefer high oil prices because they give them windfall profits, the truth is they would rather have prices ranging between US$22 and US$28 per barrel indefinitely, and keep the world hooked on oil.

The Saudis have been frank about this. 'We've got almost 30 per cent of the world's oil,' Mr Abel al-Jubeir, the foreign policy adviser to the Saudi Crown Prince, noted recently. 'For us, the objective is to assure that oil remains an economically competitive source of energy. Oil prices that are too high reduce demand growth for oil and encourage the development of alternative energy sources.'

These are smart drug dealers. The fools are the dope addicts - we, the consumers of oil.


Thursday, June 17, 2004

The oil that troubles US-China waters

Asia Times Online - News from greater China; Hong Kong and Taiwan

Oil is an essential ingredient in China's successful formula for economic growth. It is critical for driving industrial activity, generating power, constructing infrastructure projects and fueling the rapidly growing number of automobiles on China's roads. Today, imports comprise one-third of China's total oil consumption, growing 31% last year, and by 2020 some estimates put China's dependency on foreign oil as high as 70%.

Oil consumption in the United States, the world's largest consumer of petroleum, is expected to grow nearly 50% over the next 20 years. Beijing, also on the fast track to oil dependency, is on a search to secure energy sources across the globe. This quest, in addition to China's heavy reliance on Middle Eastern oil, suggests a potential rivalry between the US and China over access to oil-rich regions. Many analysts argue that the trajectories of the world's two most voracious oil consumers will inevitably lead to a clash over the scarce resource.


Some Experts Warn World Running Out of Oil Surplus

PolitInfo.com - Jun 16, 2004

For the past century most of the advances in transportation and industry have relied on energy from petroleum and other fossil fuels, but some experts warn that the peak of oil production worldwide may be reached soon and that the economic and political consequences could be enormous.

Is the world running out of oil? In the debate over that question between energy experts, environmentalists and government policy makers it often boils down to the old question about whether the glass is half full or half empty. The question is tricky because it involves not just the amount of oil potentially available beneath the earth's surface, but the difficulties, dangers and the expense of getting it out.

Paul Roberts is author of a new book: The End of Oil: On the Edge of a Perilous New World. He says that most of the easily obtainable oil, the cheap oil, has already been discovered and that it will become more and more difficult to meet world demand.

"That cheap oil is not gone completely by any means, but it is getting harder to find," he said. "You are seeing signs of it all over the place with companies like Shell Oil having to restate their reserves. Basically, they are not discovering oil as fast as they need to."

Mr. Roberts says that a peak in worldwide oil production could come within the next few decades. Making matters worse, demand for energy is increasing, driven by emerging nations like China and India. Paul Roberts says this will make the world ever more dependent on politically unstable nations that have plenty of oil.

"All of these countries have pretty severe political problems and any one of them could, at any time, erupt in some sort of civil chaos that could make production and exporting tough," he added. "We have seen that repeatedly. We saw it in Venezuela a year-and-a-half ago and we are seeing it right now in Nigeria. All it takes is for one of these countries to go off-line in any significant way and we would be in real trouble. If we think $ 40 a barrel is expensive now, try $ 80 to $ 100."

Mr. Roberts says the only way to avoid possible catastrophe is to begin to work toward a new energy future that would reduce the demand for oil. While many industry analysts agree that oil is a finite resource that could be subject to political dislocations, not everyone thinks the world is close to running out.

Dallas-based H. Sterling Burnett, a senior fellow at the private National Center for Policy Analysis, says there is still plenty of oil.

"Unless politics intervenes, the age of oil is just beginning," he said. "Currently, we have in reserves 3 trillion barrels of oil. If we did not discover one more drop, if we did not come up with new technology to extract more from the reserves we know of, we would still have enough oil for the next 56 years at the current rate of consumption with a 1.4 percent annual growth rate."

Mr. Burnett goes further, saying that new technologies could make it possible to extract oil from sites that were previously considered too challenging or expensive.

"The estimate is that we have about 14 trillion barrels of oil in shale oil and tar sands," he added. "Now, that is enough to fuel us for the next 500 years."

Of course, the only way for it to be cost-effective to recover such oil would be if the cost of crude went even higher. That would also make many alternative energy technologies more attractive to investors and consumers.

Mr. Burnett says the market will sort these things out, but author Paul Roberts suggests the market may need some help. He recommends government backing of alternative energy research. He says the government role should be to fund research and then let the market determine which technology offers the best alternative to oil.

"What has made oil such a great and powerful part of our energy economy is what we call its power density. You pack a lot of energy in a relatively small volume of fluid," he explained. "Finding something that does that cleanly, that replaces oil and gives the same bang for the energy buck, in a way that does not affect climate and does not require us to go over to the Middle East, that is a technological challenge that has not been met yet."

Mr. Roberts and Mr. Burnett agree that conservation could help keep down demand for oil and that the energy future may consist of a number of new technologies, perhaps working in tandem with a system in which petroleum is still used, but at much reduced levels. Already there are promising experimental programs utilizing not only the wind and the sun, but such things as used vegetable oil from restaurants and animal manure from large farms to produce fuel. Such projects offer the possibility of producing energy for the future that would also greatly reduce pollution and the carbon gases that many scientists believe contribute to global warming.


Shell Oil chief: my fears for planet

Guardian Unlimited

The head of one of the world's biggest oil companies has admitted that the threat of climate change makes him "really very worried for the planet".

In an interview in today's Guardian Life section, Ron Oxburgh, chairman of Shell, says we urgently need to capture emissions of the greenhouse gas carbon dioxide, which scientists think contribute to global warming, and store them underground - a technique called carbon sequestration.

His comments will enrage many in the oil industry, which is targeted by climate change campaigners because the use of its products spews out huge quantities of carbon dioxide, most visibly from vehicle exhausts.

His words follow those of the government's chief science adviser, David King, who said in January that climate change posed a bigger threat to the world than terrorism.

Robin Oakley, a climate campaigner with Greenpeace, said: "This is an important statement to make but it does have to come with a commitment to follow through, and that means making the case to his peers in the oil industry who are still sceptical of climate change."

Bryony Worthington, a climate campaigner with Friends of the Earth, said: "It isn't a responsible attitude to say we're going to pledge to do sequestration but if the plans don't work out then the world's messed up. He's done quite a clever job by making it clear he's concerned but at the same time not pledging to do anything about it."


Ron Oxburgh, chairman of Shell Oil: 'I'm really very worried for the planet'

 The Guardian - Interview

Shell's problems came at the start of what is shaping up to be a defining year for the oil industry. Political upheaval in Venezuela and no signs of improvement in the Middle East have combined to send crude values soaring, and the prospect of the £1 per litre price at the petrol pump have seen oil prices join house prices on the front pages of Britain's newspapers.

If Oxburgh thinks this is a sign of things to come, he keeps it to himself. "People who have tried to predict the future of oil prices in the past have generally speaking got it very seriously wrong," he says.

"The one thing that is clear is that oil is getting harder to find, and as more obvious resources are discovered and exploited it's going to get progressively more difficult."
High prices could help. "What will happen is that you'll find oilfields or pockets that were previously not regarded as economic, as the price goes up will become economic. If the price of crude stayed at $30 to $40 a barrel for a long time, and the world economy could sustain that, then a lot of oil would become economically extractable that hasn't been."

"The other major consideration that we have to take into account is the greenhouse effect and global warming," he admits.

Oxburgh is more direct than the PR people further down the building might appreciate.

"No one can be comfortable at the prospect of continuing to pump out the amounts of carbon dioxide that we are at present," he says. "People are going to go on allowing this atmospheric carbon dioxide to build up, with consequences that we really can't predict, but are probably not good."


Tuesday, June 15, 2004

Get Ready for $50US Oil!!

HoweStreet.com

When I was in Calgary last year visiting several oil and gas companies, the CEO of one of Canada’s best run junior oil and gas companies looked across the conference table and said something that stuck in my mind: “Get ready for $50 oil!” Such a bold prediction, made when nearly every Wall Street and Bay Street analyst was lowering his 2004 oil price prediction, underscores the massive divide in opinion on the future price of oil. Many geologists believe we are in for a period of significantly higher oil prices, while nearly all economists and the analyst community predict oil prices will fall. Who do you believe?


Empty highways

Augusta Free Press

The cost of fuel will inevitably rise as the demand increases worldwide and supplies gradually diminish. No mystery here. The world will not suddenly run out of fuel in a matter of weeks or days like someone who forgets to stop at a gas station. There is enough to last for years to come, at least until I'm so old and cranky they take my driver's license. The cause will be an "oil shock," a sudden, catastrophic failure of the market system that delivers the fuel to the end-users. The reason the market will fail will be a direct result of the U.S. policy in the Middle East that now passes under the name of a "war on terrorism."

The invasion of Iraq was a pre-emptive strike against peak oil, not weapons of mass destruction, not terrorism. The U.S., to put it simply, is behaving like a gangster, and it is laying claim to a common resource in a way that is frightening to every other oil-consuming nation, each of whom is anxious to supply their own addiction. The game that is being played is called "survival of the fittest." The arrogance of George 43, surprising even to his father, who is not a notably modest man, has had the disastrous effect of making the U.S. a target, not merely for terrorists, but for every other nation that dislikes the lying and the flaunting of international law and order that this cowboy president has engaged in.


The Peak Oil Crisis - The attempt to manage and contain it may be bringing down the Bush administration

Coup D'etat

The Bush administration has proved itself to be an insular group of inept, dishonest and dangerous CEO's of the corporation known as America. They have become very bad for business and the Board of Directors is now taking action. Make no mistake, the CIA works for "The Board" - Wall Street and big money. The long-term (very corrupt and unethical) agenda of the Board, in the face of multiple worsening global crises, was intended to proceed far beyond the initially destructive war in Iraq, toward an effective reconstruction and a strategic response to Peak Oil. But the neocons have stalled at the ugly stage: killing hundreds of thousands of people; destroying Iraq's industrial and cultural infrastructure as their own bombs and other people's RPGs blow everything up; getting caught running torture camps; and making the whole world intensely dislike America.


The link will take you to a long and difficult report. It is worth reading and re-reading.


Why the kill-for-oil culture will collapse and die - "Paper or plastic?"

Cuba and Argentina economics

Avoiding starvation = going backward?
Two nation-examples that need more attention from the global U.S. media are Cuba and Argentina. Each economy lost much in the way of material consumption that supposedly marks civilized progress and prosperity.
The people of Cuba and Argentina are doing alright by utilizing low-energy practices and systems.
Cuba suddenly found itself without petroleum from the Soviet Union, and had to scramble 14 years ago to implement bicycle/bus based transportation. If that wasn't enough of a challenge, agriculture had to be revamped to end reliance on the suddenly nonexistent petrochemicals and petroleum fuels.
Today there is almost one bicycle for every two persons in Havana, Cuba, and many of the bicycles are work-bikes that have large containers for hauling goods. Bus ridership is at about 30% of Cuba's population, compared to 2% (?) in the U.S.
Havana nowadays has 30,000 organic gardens/farms that supply one-third of the food needs of the city's two million residents.


Sunday, June 13, 2004

James Jordan - Op-Ed

Alameda Times - Star

It now appears that world oil production, about 80 million barrels a day, will soon peak. In fact, conventional oil production has already peaked and is declining. For every 10 barrels of conventional oil consumed, only four new barrels are discovered. Without the unconventional oil from tar sands, liquefied natural gas and other deposits, world production would have peaked several years ago.

Oil experts agree that hitting Hubbert's Peak is inevitable. The oil laid down by nature is finite, and almost half of it has already been extracted. The only uncertainty is when we hit the peak. Pessimists predict by 2010. Optimists say not for 30 to 40 years. Most experts expect it in 10 to 20 years. Lost in the debate are three much bigger issues: the impact of declining oil production on society, the ways to minimize its effects and when we should act. Unfortunately, politicians and policymakers have ignored Hubbert's Peak and have no plans to deal with it: If it's beyond the next election, forget it.

Fortunately, oil production does not suddenly stop at Hubbert's Peak; rather, it declines steadily over time. But because production cannot meet demand, the price of oil will rapidly and continuously escalate, degrading economies and living standards. People complain now about gasoline at $3 per gallon. After Hubbert's Peak, $7 per gallon will seem cheap. Spending $150 to fill up the SUV? Ouch!


Oil supply has us over a barrel

Alameda Times-Star

In 1971, a year before Texas output passed its peak, U.S. production was more than two-thirds of the nation's needs. Today the nation imports 54 percent of the oil it uses. M.A. Adelman of MIT notes that in 1971 non-OPEC countries had about 200 billion barrels of proven reserves. In the next 33 years they produced 460 billion "and now have 209 billion 'remaining.'" Note Adelman's quotation marks. To predict actual reserves would require predicting future exploration and development technologies.

However, the rate of discovery has been declining for several decades. Of course, oil supplies are, as some people say with a sense of profound discovery, "finite." But that distinguishes oil not at all from land, water or pistachio nuts.

Russell Roberts, an economist, says: Imagine that you love pistachio nuts and are given a room filled 5 feet deep with them. But you must eat them in the room and must leave the shells. When will you have eaten them all? Never. Because as it becomes increasingly difficult to find nuts amidst the shells, the cost of the nuts, in time and effort, will become too high. You will seek a substitute -- pistachios from a store, or another snack.


Saturday, June 12, 2004

An Oil Enigma: Production Falls Even as Reserves Rise

The New York Times - June 12, 2004 

For six consecutive years, ChevronTexaco has had good news for anyone worried that the world is running out of oil: the company has found more oil and natural gas than it has produced. Over that time, ChevronTexaco's proven oil and gas reserves have risen 14 percent, more than one billion barrels.

But near the bottom of ChevronTexaco's financial filings is a much less promising statistic. For each of those years, ChevronTexaco's wells have produced less oil and gas than the year before. Even as reserves have risen, the company's annual output has fallen by almost 15 percent, and the declines have continued recently despite a company promise to increase production in 2002.

ChevronTexaco is not the only big oil company whose production is falling despite rising reserves, though it has the largest gap. As consumers, economists and governments around the world wonder if oil supplies can keep pace with rising demand, production trends at the industry's publicly traded companies are not promising.

Collectively, they paint a picture of an industry that has depleted nearly all of the world's easily exploited reserves outside the Middle East and that is now struggling to sustain production, much less increase it. Fears about supply shortfalls and rising demand have already caused prices to climb about 20 percent this year, hovering around $40 a barrel. The four biggest companies own only about 4 percent of the world's reserves, which are mostly government-held, but they offer a unique glimpse of supply trends because they must disclose their reserves and production each year.


Take an oil price over $40 - then quadruple it

Wall Street Life

This week there was a Peak Oil conference in Berlin, a gathering of worrywarts wearing metaphorical "we are doomed" placards.

One unusual attendee was Fatih Birol, the chief economist of the International Energy Agency, who gave a speech saying that everything is fine, before admitting afterwards to a BBC reporter that everything is not. "This is not for the press," he said, after blurting out that the Saudis need to increase supply by 3m barrels a day to avert an oil crisis by the end of the year.


Friday, June 11, 2004

Face decline in oil production before it's too late

Journal Gazette | 06/11/2004

If you're wondering about the direction of gasoline prices over the long term, forget for a moment about OPEC quotas and drilling in the Arctic National Wildlife Refuge and consider instead the matter of Hubbert's Peak.

That's not a place, it's a concept developed a half-century ago by geologist M. King Hubbert, and it explains much about what's going on today at the gas pump. Hubbert argued that at a certain point oil production peaks, and thereafter steadily declines regardless of demand. In 1956 he predicted that U.S. oil production would peak about 1970 and decline thereafter. Skeptics scoffed, but he was right.

It now appears that world oil production, about 80 million barrels a day, will soon peak. In fact, conventional oil production has already peaked and is declining. For every 10 barrels of conventional oil consumed, only four new barrels are discovered. Without the unconventional oil from tar sands, liquefied natural gas and other deposits, world production would have peaked several years ago.

Oil experts agree that hitting Hubbert's Peak is inevitable. The oil laid down by nature is finite, and almost half of it has already been extracted. The only uncertainty is when we hit the peak. Pessimists predict by 2010. Optimists say not for 30 to 40 years. Most experts expect it in 10 to 20 years. Lost in the debate are three much bigger issues: the impact of declining oil production on society, the ways to minimize its effects and when we should act. Unfortunately, politicians and policy-makers have ignored Hubbert's Peak and have no plans to deal with it: If it's beyond the next election, forget it.


Oil Gone

Oil Gone

If peak oil theorists are correct, our dependence on oil is not only foolish, it's lethal. Does modern civilization have just two choices--change or perish?

In recent weeks, major outlets including CNN, the New York Times and National Geographic have run prominent features on "peak oil theory," until recently a little-known concept outside the circles of petroleum-industry geologists and hardcore conservationists. The theory's implications are literally nothing short of apocalyptic, which makes its recent dissemination by such mainstream sources even more worrisome. No blood for oil? If the peak oil theorists are correct, we are about to enter an age that makes that price seem like a bargain.
In fact, this age may already be upon us.


Thursday, June 10, 2004

TIME Magazine -- 10 Questions For T. Boone Pickens

TIME Magazine

10 Questions For T. Boone Pickens
By T. BOONE PICKENS; JULIE RAWE; JYOTI THOTTAM
Jun. 14, 2004

His name sounds as if it belonged to a blues singer, and this Texas oilman has made plenty of executives cry. The hostile-takeover artist, 76, was targeting CEOs 20 years ago for caring more about their salaries than about their shareholders. (Sound familiar?) TIME's Julie Rawe and Jyoti Thottam talked to the hugely successful hydrocarbon investor about our latest oil troubles.


DO YOU THINK GAS PRICES WILL HIT $3 A GALLON IN THE U.S.?
They could go beyond $3. We're pretty close to peaking on what the oil industry can produce worldwide. It's hard to add production, and we're also dealing with decline curves on some of the big fields. All the refineries around the world are running at full capacity. You have demand going up, and you don't have the refinery capacity to take care of it.


WILL OPEC'S DECISION TO RAISE ITS OIL PRODUCTION MAKE ANY DIFFERENCE?
I think that there's not much more production to come from OPEC. They're basically maxed out. They keep saying they're going to produce more oil, and it doesn't make that much difference.


WHAT ABOUT UNTAPPED OIL RESERVES IN CANADA?
There's no question that tar sands in Canada are probably the largest source of oil available to the U.S. over a long period of time. There's as much oil in the tar sands probably as there is in Saudi Arabia. The problem is, there's a huge capital requirement to develop that. It's really mining oil, not producing it in a conventional way. Consequently, only about a million barrels a day come out of the tar sands. And it takes several years to ramp up that production.


DO YOU THINK THAT AS OIL PRICES RISE, CONSUMERS WILL FIND NEW WAYS TO CONSERVE, LIKE BUYING MORE HYBRID CARS?
Yes, I think the consumer is going to deal with the price of gasoline, probably in several ways. One would be on a new car purchase. A hybrid would have to be a prospect. Two, they'll cut back on their driving. But remember that the price of gasoline in Europe is $5 a gallon. We've had the lowest price for gasoline consistently as long as I can remember.


WILL THE GASOLINE AGE SOON BECOME A THING OF THE PAST, LIKE THE STONE AND BRONZE AGES?
We'll be out of the hydrocarbon era before we get to 2100. We'll phase in other forms of energy by 2050. We've got to use hydrogen someplace in there. For the short term, we've got to use more of our coal reserves in the U.S., and I would suppose we'll go back to looking seriously at nuclear.


DO YOU THINK WE WENT TO WAR IN IRAQ BECAUSE OF ITS OIL FIELDS?
I don't think for a minute we went to Iraq for oil. It just so happened that it had oil. But I think we'll come out of the Iraqi situation with a call on their oil at market price.

WHAT KIND OF GAS MILEAGE DOES YOUR CAR GET?
Probably 15 to 18 miles a gallon, but I have a five-year-old BMW with 35,000 miles on it, so I'm not a big factor in the gasoline market.


3 questions not related to peak oil were omitted from this excerpt


Wednesday, June 09, 2004

Break Out the Bicycles: Oil is Running Out, But the West Would Rather Wage Wars than Consider Other Energy Sources

Break Out the Bicycles

"Some people have wacky ideas," the new Republican campaign ad alleges. "Like taxing gasoline more so people drive less. That's John Kerry." Cut to a shot of men in suits riding bicycles.

The price of oil has been rising because demand for a finite resource is growing faster than supply. Holding the price down means that this resource will be depleted more quickly, with the result that the dreadful prospect of men sharing cars and riding bicycles comes ever closer.

The world's problem is as follows. We now consume six barrels of oil for every new barrel we discover. Major oil finds (of over 500m barrels) peaked in 1964. In 2000, there were 13 such discoveries, in 2001 six, in 2002 two and in 2003 none. Three major new projects will come onstream in 2007 and three in 2008. For the following years, none have yet been scheduled.

The oil industry tells us not to worry: the market will find a way of sorting this out. If the price of energy rises, new sources will come onstream. But new sources of what? Every other option is much more expensive than the cheap oil that made our economic complexity possible.

Perhaps the presidential candidates will start campaigning next against the passage of time.


Speed up energy efficiency

Detroit Free Press

Politicians are jabbering about inconsequential short-term energy "solutions" -- such as withdrawing oil from the nation's Strategic Petroleum Reserve -- in order to put downward pressure on pump prices.

But what we really must do -- and do with great gusto -- is launch a sustained crusade to drastically improve energy efficiency, reduce reliance on fossil fuels and accelerate development of environmentally friendly alternative energy technologies.

Individual Americans can help the cause by buying more energy-efficient cars, homes and appliances.

Americans shouldn't assume that we'll always have an endless supply of oil, natural gas and coal -- or that a perpetual increase in global consumption of these finite fossil fuels won't have costly environmental consequences.

That means we have to start thinking much differently about energy. We can't continue to be fossilized fools when it comes to fossil fuels. 


Tuesday, June 08, 2004

Hidden Costs of Vehicle Replacement

ENERGY FACTS: THE AUTOMOBILE & THE ENVIRONMENT

Manufacturing an automobile requires approximately 450,000 litres (120,000 gallons) of water which comes in clean and goes out polluted in one way or another. The energy required to produce a vehicle is also very large, equal to about 12% of the energy used by the vehicle in its lifetime. In North America, the automobile is also one of the largest users of chlorofluorocarbons (CFCs). Car air conditioning units and CFC blown foam seating in automobiles, are responsible for 28% of the ozone depleting CFCs released into the atmosphere every year.


Perhaps it might be better to repair and reuse existing vehicles?


End of Cheap Oil

National Geographic Magazine

You wouldn't know it from the hulking SUVs and traffic-clogged freeways of the United States, but we're in the twilight of plentiful oil. There's no global shortage yet; far from it. The world can still produce so much crude that the current price of about $30 for a 42-gallon barrel would plummet if the Organization of the Petroleum Exporting Countries (OPEC) did not limit production. This abundance of oil means, for now, that oil is cheap. In the United States, where gasoline taxes average 43 cents a gallon (instead of dollars, as in Europe and Japan), a gallon of gasoline can be cheaper than a bottle of water—making it too cheap for most people to bother conserving. While oil demand is up everywhere, the U.S. remains the king of consumers, slurping up a quarter of the world's oil—about three gallons a person every day—even though it has just 5 percent of the population.


(More online, but the entire article is only available in print.)


Monday, June 07, 2004

Quest for energy is race against time

Guardian Unlimited | Special reports

There are two reasons why society has to get out of oil, and at first sight, they seem contradictory. Firstly, oil is running out. Secondly, we cannot afford to burn it all.
Oil is running out because it is a finite resource. Optimists, like the US Department of Energy and the oil companies, estimate that around 2,600bn barrels are left in known deposits and predictable future discoveries. Pessimists, like the Association for the Study of Peak Oil and Gas, reckon on more like 1,000bn barrels.
In a society that has allowed its economies to become geared almost inextricably to growing supplies of cheap oil, the difference is seismic. If there are 2,600bn barrels left, the topping out point - or the so-called peak of depletion - lies far away in the 2030s.


(The "optimists" give us 25 years or so to redesign and rebuild the world to work without oil as our primary fuel. That does not seem like a lot of time to do all that needs to be done. Hello!? Is anyone paying any attention?)


Is "Conservation" A Dirty Word?

The Christian Science Monitor | csmonitor.com

This 5 year old article asks the question we seem to have forgotten. Our politicians talk about "jawboning" oil producers into supplying more oil. What is wrong with this picture?


What to use when the oil runs out

BBC NEWS

Part of the attraction of oil for most of us has probably always been its key-turning, switch-flicking simplicity.
This one substance has given us food, warmth, chemicals, medicines, clothing - and above all mobility.
So it is natural enough for us to look for one neat and simple replacement which will be the perfect substitute for oil in all its versatile guises.
But the harsh truth is that nothing is going to be capable of doing everything that oil does - not yet, perhaps never.


Is the world's oil running out fast?

BBC News

If you think oil prices are high at $40 a barrel then wait till they are four times that much.
How will you pay to run your car? How will you get the children to school? How will you heat your house? How much will transported food go up in price?
How will we pay for plastics, metals, rubber, cheap flights, Simpson's DVDs, 3G phones and everlasting economic growth?
The basic answer is, we won't.


You have read all this before, but it is good that mainstream media is beginning to pay attention to and report on peak oil.


Thursday, June 03, 2004

Inflaming the debate

Inflaming the debate

On a technical level, the new pessimism about oil draws heavily on the work of two retired petroleum geologists, Colin Campbell and Jean Laherrère, and the earlier work of Shell geologist M King Hubbert. But the theoretical basis of the pessimistic predictions is weak; and the empirical track record of their approach has been a failure. In order to present potential oil depletion as a coming catastrophe, the pessimists have both to dismiss alternative energy sources and to portray society as fragile and on the point of collapse.


Wednesday, June 02, 2004

THE COMING ENERGY CRUNCH

A $2 gallon of gas is just the beginning.

You can't squeeze a whole lot of policy detail into a 30-second ad or an evening-news sound bite. But after sifting through the rhetorical chaff on gas prices, the parameters of the current national debate on energy policy become clear.

For the Bush campaign, gas taxes are out of the question. There will be no discussion of, say, the wide-ranging benefits that Europeans have derived from their $5 per gallon, or the fact that we pay a gas tax to the Saudis rather than our own public coffers. Gas taxes are simply "wacky." You'd have to be even more "wacky" to talk about people driving less.

The message coming from the Democrats is equally demagogic. Though the Kerry campaign has issued policy papers focused on reducing American dependence on foreign oil (buried deep within the Kerry web site), in public he has tended to steer clear of discussing these ideas. Rather, he uses his airtime to criticize the president.

While crowds love Kerry's line about Bush and Cheney riding to work together, there is something disappointing about the Democratic nominee ridiculing the idea of carpooling. In addition to reducing traffic, car-sharing happens to be one of the fastest, cheapest, most high-impact ways that Americans can make real reductions in daily oil consumption. Car-sharing should be part of the Democratic platform, not a laugh line.

Kerry and the Democrats' other gasoline talking points are equally ill-advised. Telling the president to do a better job of "jaw-boning" the Saudis does not address the need to make America less beholden to foreign energy suppliers. Nor does the call to release oil from the Strategic Reserve.

The strategy for both campaigns so far has been pretty simple: Gas prices are rising rapidly. Blame it on the other guy. Present yourself as the guy who will make gas cheaper.


Tuesday, June 01, 2004

t r u t h o u t - Saudi Hostage Drama: Violence and a Looming Oil Crisis

t r u t h o u t - Saudi Hostage Drama: Violence and a Looming Oil Crisis

The attack sent shockwaves through a western world already facing high oil prices and now the prospect of worsening violence in a kingdom riven between its ruling royal family and jihadist groups determined to bring it down.
As Saudi security officials surveyed the horror, energy experts warned of the potential for a global fuel crisis triggered by instability in the country with the world's largest reserves.The situation in Saudi Arabia has already pushed prices to $40 per 25-gallon barrel.
"This is close to the nerve centre of the Saudi oil industry," said Yasser Elguindi, an analyst with Medley Global Advisers in New York. "It could have a devastating impact on the oil market when we reopen [on Tuesday] after the Memorial Day weekend."


The Hindu Business Line : Is an oil peak upon the world?

The Hindu Business Line : Is an oil peak upon the world?

A view from India.