Peak Oil News: 01/01/2005 - 02/01/2005

Saturday, January 29, 2005

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.


Thursday, January 27, 2005

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 And oil tankers are fully booked, but outdated ships are being decommissioned faster than new ones are being built.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."


Tuesday, January 25, 2005

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.


Monday, January 24, 2005

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."


Thursday, January 20, 2005

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.


Wednesday, January 19, 2005

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.


Monday, January 17, 2005

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 2nd Stage. Basveshwara Nagar, Bangalore – 560 079.


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


Sunday, January 16, 2005

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.


Saturday, January 15, 2005

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."


Friday, January 14, 2005

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.


Thursday, January 13, 2005

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