Peak Oil News: 11/01/2006 - 12/01/2006

Monday, November 27, 2006

Peak oil - the South will rise again

Augusta Free Press

By Erik Curren

Science-fiction writers like to imagine how, after a limited nuclear war, disease pandemic or other catastrophe, North America would break up into half a dozen or so smaller nations. There would be French-speaking Quebec, Yankee New England, an eco-state in the Pacific Northwest, a Latino-dominated neo-Aztec kingdom in the Southwest and of course, a risen-again Confederacy in the Southeast.

These days, such scenarios are not just entertainment; they're contingency planning. Futurists are now concerned that an energy crisis brought on by the peaking of world oil could disrupt America's economy and politics enough to strain the U.S. social fabric beyond its breaking point.

Peak oil is the idea that someday - even optimists agree that it will happen within the next 30 years - the world will reach the point where oil production can no longer be increased to meet rising demand and must begin its inevitable decline.

That doesn't mean that oil will run out right away. What it does mean is that as supplies run down and countries compete for an ever-tighter supply, prices are sure to rise. Oil is so important to modern society - 95 percent of world transportation runs on oil - that the end of cheap oil could be worse than the Great Depression of the 1930s.

And unlike the editors of Wired magazine, peak-oil theorists are not optimistic that new energy from ethanol, hydrogen or wind electricity will be powerful enough to do all the things we do with oil today and meet rising demand in the future.

Instead, peak-oil analysts say that unless we start soon to radically rewire American society to use much less energy, the U.S. is likely to face economic and political collapse before century's end.

The soccer mom-cracker riots

Perhaps the best-known prophet of peak-oil doom is James Howard Kunstler, who predicts that America will suffer decades of economic hardship and political unrest after peak oil hits. In his 2005 book The Long Emergency, Kunstler writes that "it would be reasonable to wonder whether the United States will continue to exist as a unified entity, and what kind of strife the Long Emergency could ignite region by region."

Bye bye, U.S.A. Hello, C.S.A.?

Kunstler, who has chosen to ride out the Long Emergency in Upstate New York, does not think the South will fare well. Here's his scenario:

The suburban development that has powered the economic engine of the New South for the last 50 years in places like Atlanta will grind to a halt. High-gas prices will make long commutes too expensive; cul-de-sac developments and McMansions will lose their value almost overnight; jobs will evaporate as businesses go bankrupt; and tax attorneys, neurologists and bond traders and their families will find themselves suddenly destitute.

Angry suburbanites - being Southerners, many of them own guns - will join with angry Crackers (Kunstler's word) in riots and rebellions directed at local and federal authorities, who will be increasingly powerless to respond as government starts to break down.

In an energy-starved world, the South's only hope for survival will be a return to agriculture. And here Kunstler imagines a visit from the ghosts of the Southern past.

"There are two previous models for farming in the American South," Kunstler writes. "The first was the plantation system based on slavery. The second was really a modified version of the first when slavery was outlawed: share-cropping, in effect, serfdom. Both systems are essentially feudal. I doubt slavery will make a comeback, but I wonder about sharecropping, or something like it. The persistence of culture is a real phenomenon. Over a period of time, a Southern agricultural economy may reorganize itself by default along the feudal lines that existed historically, odious as it may seem."

If Dixie breaks off from the U.S., Kunstler says that its government is likely to be "despotic and theocratic," backed by fundamentalist preachers saying that the End Times have come and crying down God's judgment on a sinful society. To make things worse, its location and warmer climate will make the South will more vulnerable to new tropical diseases spread by global warming.

Well, that's the view from New York State.

Traditional values against oil culture

It's hard to argue that global warming won't hit the South harder than New England or New York. And unless we act to reduce fossil-fuel pollution fast, the Appalachians may be the only place south of the Mason-Dixon to retreat when coasts are devastated by Katrina-strength storms, and tidewater and piedmont lands are infested by mosquitoes bringing malaria and dengue fever.

Of course, we don't have to see Kunstler's vision as a literal prediction. Might it just be a rhetorical exercise, a provocation to shock us into preparing for peak oil (and, to a lesser extent, global warming)? Yet, if we want to play this scenario game, it seems fair to ask whether there might also be aspects of the South's traditional culture that are more progressive than those that Kunstler finds.

Indeed, might the South, with its small-town and agrarian values, be better off in an energy-starved world where we have to make more of our stuff and grow more of our food close to home than many places in the North that have always relied heavily on trade and manufacturing?

While the twin evils of suburban sprawl and factory farming are indeed huge threats to a sustainable future, they have not yet entirely snuffed out the traditional Southern way of life that, in many aspects, remains a model for a re-localized society elsewhere.

Many communities still retain vibrant local economies. My own town, Staunton, has seen a renaissance of its downtown, with numerous shops and restaurants in walking distance from hundreds of well-preserved Victorian homes and Mary Baldwin College. A seasonal farmer's market is increasingly popular as a source of local food from the Shenandoah Valley's many remaining family farmers.

Nearby, in the grazing land southwest of town, superstar organic farmer Joel Salatin - profiled in Michael Pollan's 2006 book The Omnivore's Dilemma: A Natural History of Four Meals - spreads his gospel of sustainable local food one juicy steak at a time.

Perhaps Southern towns will be slower to adopt written peak-oil plans or formal re-localization efforts than places in New England or California. But the flip side of this intellectual conservatism is that the South was also slow to give up the small-town life and vibrant communities that such activist efforts attempt to rebuild.

Like Staunton, hundreds of other towns across the region have embraced (or never abandoned) farmer's markets, revamped their downtowns and nurtured the best of the South's values - family, community and stewardship of the earth.

For many, these values are entirely in line with the Southern religiosity that seems so frightening to many Northern liberals.

As a new generation of evangelical Christians (many from the South) has taught us, environmental stewardship is taught by the Bible. Today, many churchgoers in the South see it as their duty to fight global warming, to support local food and to demand clean energy as a way to protect God's creation.

Indeed, Southerners with deep roots in the land - family farmers, hunters and anglers - have practiced earth-stewardship for generations before hippies started leaving Greenwich Village for Vermont.

Southern, not Confederate, values

Finally, if there's more to Dixie than the oil-addicted suburbs of the New South - which have nothing Southern about them and are just the same sprawl as you'll find in Los Angeles - there's also more to the region than the KKK, NASCAR and vigilante justice.

Writing recently in The New Yorker (ironic, no?), book critic Louis Menand distinguishes the gems that the South should carry into the future from the garbage it must leave behind.

"The Southern point of view must not be confused with the Confederate point of view," Menand writes, "which was a vision of an expanding slave empire in which businessmen operate vast plantations on assembly-line principles and hold absolute power over people whose ancestors had once, on another continent, belonged to local communities, made a living in the traditional ways, and so on."

By contrast, Menand says, the Southern outlook is skeptical of technological advances and the power of big money. It is "the point of view of people in local communities everywhere, making a living in the traditional ways, about to be flattened by the bulldozer of modern life."

Southerners have always stood for tradition against modernity, for local community against the global economy, for humans against machines, for the farm against the factory, for the family business against the multinational corporation. No need to dwell on Gone with the Wind - more nuanced views of the South from Mark Twain, William Faulkner, Flannery O'Connor, Alice Walker and Charles Frazier (author of Cold Mountain) literally speak volumes on the independence of the Southern spirit, black and white.

And Southerners today aren't just black and white. They're also yellow and brown. Every decent sized town now has a Chinese and a Mexican restaurant. Indian and Korean can't be far behind.

New England may have its town meetings, but democratic ideals are not alien to the South. Doesn't Dixie deserve some credit for native sons Washington, Jefferson and Madison? George Mason's 1776 Virginia Declaration of Rights served as the model for the Bill of Rights later added to the U.S. Constitution.

And whether they think that the war of 1861-1865 was about slavery or about states' rights, historians agree that outside the small upper class of big planters, most Southerners owned few slaves or none at all and further, that many Southerners opposed the Peculiar Institution. Today, we can accept that slavery was an unqualified evil without tarring the whole of Southern culture with its brush.

As we plan for peak oil, we should not forget that history offers us hopeful models, as well as frightening ones, for the future. This is as true in the South as in New York or New England, where, by the way, many more people are involved in global trade, financial markets and oil-dependent manufacturing than in Tennessee or North Carolina.

Whether we think that the U.S. breaking up is just science fiction or a serious scenario made likely by peak oil, the idea of the South rising again is a powerful image to organize our thoughts and actions today.

If Southerners choose carefully from their diverse heritage - discarding racism, violence and know-nothing jingoism while embracing community, family and stewardship of the land - the rise of Dixie could be a good thing for everybody.


Friday, November 24, 2006

The CERA Report

By Jim Kunstler

Last week, Cambridge Energy Research Associates (CERA) released a report saying that there was no imminent global oil problem and that enough new oil would come on-line to permit current levels of consumption -- and beyond! -- for more than a hundred years into the future. CERA's stunningly disingenuous report flies in the face of everything that is known about the current world oil situation.

CERA is fronted by Daniel Yergin, author of the Pulitzer Prize-winning history of the oil industry, The Prize. Apparently, Yergin has parlayed his legitimacy as an historian into running a disinformation service wholly owned by the IHS Corporation, a lobbying and public relations firm serving the defense, oil, and automotive industries. Apart from making a lot of money as executive vice-president of a company with about $300 million in net annual profits over about $500 million in gross revenues, it is a little hard to discern what Yergin's motives might be in shoveling so much bad information into the public arena.

Much of CERA's "story" hinges on the supposition that snazzy technology will allow the recovery of "oil" (liquid hydrocarbons) from solids that require costly mining and processing operations to covert them to liquids. In effect, CERA says that tar sands, kerogen shales, coal-to-liquids, plus super-deep ocean drilling will not only make up for currently depleting fields of easily-acessed liquid sweet crudes, but actually surpass current total production. This would seem, on the face of it, to violate everything that is known about Energy Returns on Energy Invested (ERoRI). And, in fact, the very companies working the tar sands in Alberta, Canada, have just this year steeply raised their dollar estimates of what it will take to convert that stuff into usable liquids -- it ain't a pretty story.

CERA does not acknowledge some of the fundamental facts of the current situation, for instance that the world's four super-giant fields responsible for at least 15 percent of total global production since 1980 (Ghawar in Saudi Arabia, Burgan in Kuwait, Daqing in China, and Cantarell in Mexico) have all passed peak and turned down into depletion. CERA doesn't acknowledge that discovery of new oil peaked worldwide in the 1960s with more than 40 years of steady decline since then. Or that there has been almost no provable meaningful discovery the past several years (and Chevron's as yet unproved deepwater "Jack" claim of 3 to 15 billion barrels total is not significant in the context of a world that now burns through 30 billion barrels a year.) CERA doesn't acknowledge that the predicted US peak of 1970 was absolutely on target and that our domestic production of regular crude has fallen from around 10 million-barrels-a-day in 1970 to under 5 m/b/d now (still declining yearly, including the Alaska North Slope fields). CERA doesn't acknowledge that current total global oil production through 2006 is at least absolutely flat and more likely falling (depending on whose numbers you look at), which would tend to indicate that the world has bumped up against the ceiling of its all-time total capacity. CERA doesn't acknowledge that exports are down nine percent this year because the nations with export capacity have growing populations and economies that require more and more of their own oil.

The CERA story also tragically gives aid and comfort to those who deny that climate change needs to be taken seriously, since it is saying, in essence, that we can easily continue pumping carbon dioxide into the atmosphere -- by burning as much coal as we can. The CERA report amounts to "don't worry, be happy."

Perhaps most tragically, there is no corrective for this mendacious PR. It's not against the law to spread lies about a business venture -- which is what the oil industry is -- even if its truthful condition is critical to the functioning of our society. There's no oversight committee or agency authorized to investigate public relations activity. It's a basic case of buyer beware. Unfortunately, the buyers in this case are America's political leaders and the news media responsible for informing the public.

The mainstream media last week swallowed CERA's PR hook, line, and sinker, without a single reflective burp. It even drove the prices on oil futures markets down a few dollars a barrel -- though the price was back up by Friday. The only cogent analysis of the CERA report took place on the Internet, and for the most part on a single site: TheOilDrum.com, which is the best-informed forum of debate on these issues operating in the United States.You can go directly to their initial response, composed by Dave Cohen by clicking on this link. It's worth taking the trouble to read.


Thursday, November 23, 2006

The Peak Oil Crisis: Picking the Peak

Falls Church News-Press

By Tom Whipple

Last week Cambridge Energy Research Associates (CERA) who characterize themselves as "a leading advisor to international energy companies, governments, financial institutions, and technology providers," sent out a press release announcing that they had a new report on peak oil for sale. For some time now, CERA has been the leading debunker of the notion that world oil production might just peak in the near future, so their reports are always of interest.

They don't say oil production will never peak, it's just that they want you to believe that the peak won't come until 2030 and after that production will decline so gradually that there will be plenty of oil right on out through the rest of the 21st century.

The occasion of a "new" report on peak oil from CERA always creates a great stir amongst followers of the peak oil story. This time was no exception. CERA is, of course, a profit-making entity that is used to selling their analyses to major corporations and rich governments for big bucks, so $1000 was set as an appropriate amount for a 16-page report debunking a subject as important peak oil.

CERA, or at least their PR folks, realized that at this price, "WHY THE PEAK OIL THEORY FALLS DOWN" was unlikely to make the best seller list, so they thoughtfully provided a tightly written four page press release covering the main points of the study. This of course allowed the world's press to write stories about the gist of the report without having to pony-up the $1000.

The purpose here is not to critique the CERA report's shortcomings for within hours of the press release's issue, numerous voices from the Internet had torn the CERA report, its logic, and argumentation into a thousand intellectual shards.

In case you are interested, there was nothing new in the report that CERA has not said many times before. The heart of their argument is that their parent company has a secret database of the world's oil fields. After studying this database, depletion rates, and likely new sources of oil or oil-like hydrocarbons, they conclude that world oil production will continue growing right on up to 130 million b/d by 2030. After that, production will bounce along on their famous "undulating plateau" for decades giving us plenty of time for future generations to go out and find some other source of energy. You should be aware, however, that several other individuals and organizations have done similar analyses and have come to far more alarming conclusions.

Now there is nothing intrinsically wrong in an organization examining a problem as complex as peak oil and coming up with an optimistic judgment that we have 25 years of plenty ahead. They start to get out of line however when they mischaracterize what serious students of peak oil are really saying and follow this up with dubious assumptions that technological advances in the near future will turn all manner of carbon deposits into affordable fuels.

This all leads to the question of just what is going on here? Why is CERA putting out the same old claims -- this time wrapped in some name-calling about the inadequacies of the people who believe that peak oil is imminent? Why is CERA ignoring reams of solid evidence that world oil production is indeed approaching a peak and that there is unlikely to be any technological quick-fix? Why are they doing this now?

There just might be a clue buried in the rather strange first paragraph of CERA's press release. "The peak oil argument is based on faulty analysis which could, if accepted, distort critical policy and investment decisions."

We might just be on to something; widespread acceptance of imminent peaking of oil production is "distorting critical policy and investment decisions?" What policies and whose investment decisions?

CERA, of course, makes a good living by selling advice about the future of energy to corporations and governments that can afford very expensive reports and consulting fees. There is also no question that many investments decisions made in 2006 are going to look brilliant or dumb depending on whether oil is cheap and plentiful or expensive and scarce ten years from now.

Moreover, there is no secret about peak oil and the path to the peak. It is all over the Internet in as much detail as one would like to know. It is highly unlikely that planners for large corporations are unaware of the concepts behind peak oil and do not know that the price of oil has increased three or four fold in recent years. The price spikes of last summer coupled with the problems that Detroit has had selling large cars should be enough to focus most decision-makers’ attention.

CERA is clearly hanging its credibility and future on the idea that worldwide oil depletion is still a long ways off. It is a popular message and probably finds a good market in corporate board rooms where a massive paradigm shift is highly unwelcome news.

Events of the last year, however, should give those accepting this optimistic view cause for concern. It is not much of leap to believe that CERA is coming under heat from those who recognize that a bad call on peak oil will be devastating. This CERA report, which is obviously an attempt to defend their position, may be a sign that the message of peak oil may just be getting through to the corporate world.


Tuesday, November 21, 2006

Peak Oil: Even If The Optimists Are Right, Time Is Getting Tight

nickles.com

By  Mike Byfield

Peak oil proponents and skeptics agree that world production will eventually crest. Also, both sides of this debate accept that the decline curve will be gradual rather than sudden (with a little luck). Their common ground, although limited and easily obscured by emotional intensity, is slowly growing.

Aptly illustrating this blend of acrimony and agreement was a report issued last week by Cambridge Energy Research Associates (CERA) - Why the Peak Oil Theory Falls Down: Myths, Legends, and the Future of Oil Resources - and the rebuttal from the Association for the Study of Peak Oil & Gas (ASPO).

Peter Jackson, CERA's director of oil industry activity, remarks acidly that the "peakist argument is not grounded in a credible systematic evaluation of available data." Randy Udall, a co-founder of ASPO, retorts that CERA is peddling "PetroProzac" which lulls attention away from urgently needed actions.

Even so, CERA and ASPO agree on a great deal. For example, they both think the world may very well wind up more dependent on oil from the Middle East. And they agree that available data on global oil and gas reserves remains incomplete, most worryingly for those massive but ageing oilfields of the Middle East.

CERA and ASPO accept that North America's wealth-making economy rose on a foundation of cheap energy. "North Americans are predisposed to failing the energy IQ test," says Udall. Drivers here cheerfully assume that relatively inexpensive gasoline will continue to flow from their neighbourhood pump more or less forever.

Plenty of other people would like to share that exuberant confidence in prosperity but cannot. Peakists and supply optimists alike recognize that billions in Africa, Latin America and Asia will only achieve a modern standard of living through dramatically greater energy supplies and better energy conservation.

CERA and ASPO believe that world demand could well outstrip conventional oil supplies within the relatively near future. And the analysts of both organizations accept that other forms of petroleum can be developed.

Jackson and Udall also agree that supply will become particularly tight if wars and unwise governments disrupt oil developments. Above-ground factors may be more limiting in the near term than geology.

So where do CERA and ASPO actually disagree?

* Udall thinks global oil flows will crest within a decade, possibly sooner. Jackson pegs the crest within 50 years and not before 2030.
* CERA believes alternative supplies can be brought on stream through oilsands, very deepwater reserves, condensate and gas liquids, and conversion of both natural gas and coal to liquid form. ASPO, while acknowledging that those resources are vast, questions how quickly they can be brought on production.

In terms of oil demand, the consensus seems quite clear. Since 1950, world consumption has increased eight-fold, and humanity will urgently require more energy in the near future.

In terms of supply, everyone agrees that oil and liquids supply will be likely be constrained but it's impossible to pinpoint when. Even optimists, however, think the deadline may fall within 30 years.

Three decades. To develop new world-scale supply technologies - whether for alternative types of petroleum or for other energy forms like sunlight and so forth - 30 years is not a long time. In fact, it's the near future.

For instance, Alberta's very first barrel of synthetic crude was produced four decades ago, and the oilsands have only now shown up as more than an insignificant blip on the world production map. Even CERA's limited optimism rides on improving that performance by a huge margin in future.

The international consulting agency guesstimates that the world's productive capacity can rise by 50% within 30 years but the increase depends entirely on non-conventional sources for oil. And even if the forecast prove correct, billions of people would apparently remain mired in poverty.

William Ramsay, deputy director of the International Energy Agency (IEA), warned a Toronto conference earlier this month that global energy numbers are not adding up well. "The way we are going, we are on course for an unstable, dirty and expensive energy future," he said.

Ramsay, a former American ambassador, handled energy and petrochemical issues when the North American Free Trade Agreement was negotiated. In Toronto, he made an impassioned appeal for aggressive government action on mandatory energy conservation.

Conservation, while excellent as far as it goes, at most buys time. An energy-rich world will require billions of dollars in research, trillions for development. It's probably worth remembering that the oilsands could not have been developed without efficient co-operation between governments and oil producers.


Saturday, November 18, 2006

Historian says peak oil production is still a quarter-century away

McClatchy Washington Bureau

By Kevin G. Hall

Far from being a nearly exhausted resource, the world's oil reserves are three times bigger than what some popular estimates state, and peak global oil production is still about a quarter-century away, according to a new study by Pulitzer Prize-winning oil historian Daniel Yergin.

The remaining oil resource base is about 3.74 trillion barrels, according to a report released Tuesday by Cambridge Energy Research Associates, which Yergin runs. That's more than three times the 1.2 trillion barrels that "peak-oil" theorists suggest.

CERA's report, titled "Why the Peak Oil Theory Falls Down," challenges an increasingly popular view that the world is about to run out of oil. On the contrary, CERA argues that the world is likely to begin running out of oil between 2030 and the middle of the century. Even so, CERA says, efforts are needed now to push that date back, such as new oil field discoveries, new technologies, energy conservation and alternative energy sources.

Peak-oil theorists warn that the world is on the cusp of a disastrous and rapid decline in oil production. A leading proponent of the theory is oil banker Matthew Simmons, who in the popular book "Twilight in the Desert" suggested that the world's top producer, Saudi Arabia, has entered an oil-production decline and will take the world down with it. Last month, Simmons told a forum that the world might have reached peak oil production last December.

The peak-oil theory has gained supporters since late 2004, when surging global demand for oil began tightening up available supplies and driving up world oil prices. The price hit $78.40 a barrel in July, but has fallen to less than $60 a barrel in recent months.

The CERA study debunks the so-called Hubbert Peak Oil Theory, first espoused in 1956 by geologist M. King Hubbert. Working at the time for Shell Oil Co., he predicted that world oil production would follow a bell-shaped curve in which production grows steadily until it peaks, followed by a rapid decline.

Hubbert was pretty accurate on the timing of U.S. peak oil production, coming within two years of 1970, the year experts now recognize as the peak of continental U.S. production.

But his theory failed to recognize that new technologies enabled reserves to grow over time. His theory preceded the exploitation of massive oil reserves in Alaska and the Gulf of Mexico.

That's why Yergin dismisses talk of peak oil.

"This is really the fifth time we've `run out of oil,'" Yergin said in a teleconference with journalists on Tuesday. He recalled past predictions dating back to 1880 of an end to oil or gasoline production.

Yergin's views carry weight because he won the Pulitzer for his 1991 book "The Prize," an exhaustive history of oil economics.

He and colleagues believe that the decline in oil availability will play out as an "undulating plateau," in which annual production produces a series of ups and downs, eventually peaks and then declines slowly.

"We see the undulating plateau existing one or two decades, rather than a sharp decline," said Peter Jackson, CERA's director of oil industry activity. He sees outright decline beginning no earlier than 2030 and perhaps after 2050.

Future oil supplies, said CERA, will be accessible by new technologies that permit drilling more than 7,000 feet below the ocean's surface or extracting oil from tar-like deposits in sandy soil found in western Canada.

"Ours is not a view of endless abundance of resources," said Jackson, cautioning that he doesn't want CERA's findings to "distract us from addressing real issues."

Another source of optimism for this energy-hungry world emerged from another report this week, this one a technical paper from the Los Angeles-based think tank Rand Corp. It ran 1,500 simulations of varied energy prices and technology costs to estimate future supplies of both renewable and nonrenewable fuels.

It concluded that up to one-quarter of the electricity and motor fuels consumed in the United States in 2025 could be produced from renewable sources, up from only 6 percent today. For that to happen, the price of fossil fuels must remain high and the costs of producing alternative energy must keep falling.

"The renewables case could displace about 2.5 million barrels a day of petroleum products in the United States in 2025, or 20 percent of total consumption," the Rand report said.

Together, the two reports give hope that energy will be plentiful for another generation or more.

"I've never seen so much activity in terms of energy technology all along the spectrum," Yergin said. "I think the system is responding."

For more on the CERA study, click here: Study at www.cera.com

For the Rand report, click here: Rand Study


Does the Peak Oil 'Myth' Just Fall Down? -- Our Response to CERA

The Oil Drum

By Dave Cohen

With the release of Why the "Peak Oil" Theory Falls Down — Myths, Legends and the Future of Oil Resources by Peter M. Jackson, Cambridge Energy Research Associates (CERA) attempts to cast doubt on the credibility of those with imminent, empirically-based concerns about our future oil supply.

CERA's "Decision Brief" requires a response because since 1870, the health of the world's economies have hinged on a secure, dependable and growing flow of "conventional" oil. Their forecast, shown in Figure 1, predicts that the oil supply will continue to grow and sustain economic growth.

Click to read entire article.


Thursday, November 16, 2006

The Peak Oil Crisis: The Studies

Falls Church News-Press

By Tom Whipple

Across the world governments are scrambling faster and faster preparing for the coming energy crisis. Delegations from China are everywhere making deals for a share of the soon-to-dwindle oil flow. Almost weekly there is a new announcement from Beijing regarding plans for more wind, solar and biofuels. Japan and Korea are looking for alternative sources of energy supply. Sweden is saying, flat out, that peak oil is coming and is making plans for a fossil fuel-less future.

The European Union is all over the map with plans for alternative fuels, new regulations on energy consumption, and efforts to guarantee an energy supply for the continent.

Meanwhile, energy exporters are reveling in their newfound wealth and influence while in the poorer corners of the world people are quietly shutting off the lights. For many, the oil age ended when oil reached $60 a barrel.

Here in America, however, there is as yet little sense of urgency about the future of our energy supply. Last summer when gasoline was $3+ a gallon and warnings of devastating hurricanes were in the air, Congress was indeed thrashing about in an attempt to reassure the voters they would do something prior to the fall elections. But the storm subsided, the hurricanes went away, oil stockpiles climbed, gasoline settled back to $2, and all was well. With a sigh of relief, the Dow-Jones surged to a new all-time high.

Should any of you be feeling complacent, however, let me reassure you that the world is still burning 85 million barrels a day (b/d), there really have not been any important new discoveries, no world-saving technological breakthroughs have come to light, and you are only continuing to drive because so many of the world's peoples can't afford $60 oil.

Beneath the surface in America, however, there is movement. The Democrats now control the Congress and are already floating proposals that could help with the coming crisis. These include rolling back tax breaks for the major oil companies, probing off-shore lease deals, providing more money for renewable fuels, pushing for diesel and electric cars, and settling the spent nuclear fuel issue.

Of more long-term significance, however, two major studies of the prospects for world energy supplies are currently underway in Washington. The first of these is being done by the Government Accountability Office and is to be released on February 28. This study will actually deal with the prospects for "peak oil" -- when it will come and what can be done to mitigate the consequences. The GAO was asked by the House of Representatives Science Committee to undertake this study that has been underway for over a year.

The second and what on the surface sounds the most in-depth study of world energy resources ever undertaken is being done under the auspices of the National Petroleum Council (NPC). This council, a federally chartered and privately funded advisory committee to the Secretary of Energy, was established by President Truman in 1946. Its purpose is to represent the views of the oil and natural gas industries with respect to any matter relating to oil and natural gas. Note the words "the views of the oil and natural gas industries" as they just may come back to haunt us after the two studies are released.

On October 5, 2005, Energy Secretary Bodman sent a letter to the NPC asking what the future holds for oil and gas supplies, can supplies continue to be found at affordable prices, and just what does the oil and gas industry recommend to ensure our prosperity? The issue was promptly accepted for study and the next seven months were spent planning and getting organized. Two weeks ago the NPC released an updated status report outlining the details of just who is studying what.

The scope and work plan for the study are truly impressive. Task groups are to work on supply, demand, technology, and geopolitics. The task groups are to be overseen by a coordinating sub-committee that in turn reports to a Global Committee and finally to the NPC leadership itself. These task groups are supported by 25 "cross-cutting" subgroups, which are to examine smaller topics such as biomass, nuclear power, and "non-proprietary data." At last word some 200 people were involved in the NPC effort. The study also is reaching out to nearly everyone who can spell "oil" -- academia, laboratories, professional societies, consultants, governments, industry and you-name-it.

From reading the work plan for the study, one can't help but be impressed by how thorough and comprehensive the study will be. Of particular interest is the opportunity to use and assess proprietary information about the world's oil reserves and prospects for production held by participating oil companies.

What can we expect from these studies? The GAO effort will almost certainly be the straightforward professional exercise we have come to expect from this organization. The study will probably acknowledge that world oil production will peak someday and the researchers, who work for the Congress, will do their best to give a balanced answer to questions of when production will peak and what might we do about it.

As for the NPC study, it would be unfair to prejudge something that has not yet been written. Considering its proposed scope and the number of people involved in the drafting, it may provide much valuable new data and many insights into the prospects for the earth's energy resources. It could even turn out to support the idea that severe energy shortages lie just ahead and give a balanced presentation of the prospects for energy during the next 25 years.

On the other hand it is hard to avoid noting that several of the leaders of the NPC study have long records of vehemently opposing the idea that world oil production will peak within the next 10 years. Moat notable of these are the study's chairman, Lee Raymond, formerly of ExxonMobil, and Daniel Yergin of Cambridge Research Associates.

If one were cynical, you could believe that the NPC study, which by definition is to provide the oil and gas industry's position, was commissioned to provide a counterweight to the independent GAO study should it conclude that peak oil is for real and imminent. The timing of the two studies' release will of course give the NPC plenty of time to incorporate or attempt to refute whatever evidence or logic the GAO cites in reaching its conclusions.

No matter what the studies conclude, the possibility that our oil supplies will decline in the near future is one of the most, if not the most important issue facing the world in the coming century. These studies are bound to play a major role in the coming debate.


Wednesday, November 15, 2006

Congressional peak oil caucus responds to CERA study

EnergyBulletin.net

By Roscoe Bartlett and Tom Udall

Congressmen Roscoe G. Bartlett (R-MD) and Tom Udall (D-NM), cofounders and cochairmen of the Congressional Peak Oil Caucus, said that a new report released today by Cambridge Energy Research Associates (CERA), Why the Peak Oil Theory Falls Down: Myths, Legends, and the Future of Oil Resources, confirms the urgency for the United States government to adopt a crash program to mitigate the devastating consequences of peak oil.

Congressman Bartlett said, "The CERA report agrees that world oil production will peak and projects it will occur within 20-25 years. However, world demand is growing exponentially - faster than production so the CERA report confirms the likelihood of future shortages of liquid fuel and much higher and volatile prices. A major flaw in the CERA report is its reliance upon questionable assessments of global reserves by the USGS. USGS estimates of future world reserves equate a 50 percent probability with a 50th percentile or mean. That is a bizarre and totally inaccurate use of statistics. It almost doubles the amount of projected reserves compared to the 95 percent probable estimate. Actual discoveries are tracking the 95 percent probable trend. That means world oil production will peak much sooner than CERA projects in this report."

Congressman Udall said, "CERA's report is one of the most optimistic predictions for the peak in global oil production to date, and it still underscores the need to address this problem immediately. Whether it is Peak Oil, global warming, or the fact that some of the money we send overseas to support our oil addiction comes back to us in the form of terrorism, the U.S. cannot wait any longer to develop sensible and sustainable alternatives to oil."

Congressman Bartlett added, "The February 2005 'Hirsch' report by the U.S. Department of Energy and a September 2005 report by the U.S. Army Corps of Engineers both note that it would take a minimum of 20 years to avoid devastating consequences from peak oil. The CERA report supports the urgency and necessity for the U.S. government to adopt a crash mitigation program. A crash program will need the total participation of the American public like we had with WWII Victory Gardens, the technological focus of the Apollo Moon program and the urgency of the Manhattan project."

"I look forward to two forthcoming reports about peak oil to move this policy debate forward," said Congressman Bartlett. "A report that I requested from the Government Accountability Office (GAO) is expected in early 2007."

Department of Energy Secretary Samuel Bodman commissioned a report by the National Petroleum Council (NPC) expected to be released in mid-2007.


Global Oil Output Won't Peak for 25 Years, Yergin's Group Says

Bloomberg.com

By Joe Carroll

Global oil production will increase for at least the next 25 years as new drilling and refining techniques make it possible to tap heretofore untouchable reserves, according to Cambridge Energy Research Associates, the consulting firm run by Daniel Yergin.

The world probably has 3.7 trillion barrels of oil left, more than twice the estimates of geologists and analysts such as Matthew Simmons, of the investment bank Simmons & Co., who argue global output is close to a peak, said Peter Jackson, director of oil-industry research for the Cambridge, Massachusetts, firm.

``The peak-oil theory causes confusion and can lead to inappropriate actions and turn attention away from the real issues,'' Jackson said in remarks prepared for a conference call today with analysts, investors and reporters. ``Oil is too critical to the global economy to allow fear to replace careful analysis about the very real challenges.''

The late geologist M. King Hubbert, working for a unit of Royal Dutch Shell Plc, first put forward in 1956 the theory that output from a specific oil deposit or region would peak and then start to decline following a predictable curve. His ideas have gained currency as oil prices tripled in the past five years and producers struggled to keep pace with rising demand in China.

The theory is ``misleading'' and based on incomplete data, according to today's report from Cambridge Energy. Worldwide oil production will rise by more than 50 percent to about 130 million barrels a day around 2030 before output plateaus, the report said. Yergin, the firm's founder, wrote ``The Prize,'' a Pulitzer-winning history of the oil industry.

When global crude output begins to fall around 2050, the decline probably will be gradual, giving policy makers, industry and energy producers time to develop new alternatives to petroleum-based fuels, the report said.

Peak Oil Study Group

The Association for the Study of Peak Oil estimates the world has 1.46 trillion barrels of oil left and that production will peak in 2010, according to the group's November newsletter. The group's leaders include British geologist Colin Campbell, who helped popularize the peak-oil theory with his 1997 book, ``The Coming Oil Crisis.''

An August report from Cambridge Energy that took issue with the peak-oil theory was criticized by the President of the peak oil association, Kjell Aleklett, as a money-making vehicle based on proprietary data that the firm was unwilling to submit to impartial scientific review.

Aleklett said Cambridge Energy analysts were too optimistic about the ability of big producers including Saudi Arabia to increase output.

Congress

U.S. Representatives Roscoe Bartlett, a Maryland Republican, and Thomas Udall of New Mexico, formed the House Peak Oil Caucus to promote the theory among lawmakers. Bartlett and Udall endorse the peak oil association's prediction that output will start declining after 2010.

``There is not much time to act,'' Udall, a Democrat, told a House Energy and Commerce Committee panel in December. ``Since oil provides about 40 percent of the world's energy, a peak in global oil production will be a turning point in human history.''

Refiners have used about 1.08 trillion barrels of crude since the birth of the petroleum industry in Pennsylvania in 1859, according to Cambridge Energy.

Undiscovered fields probably hold 758 billion barrels, followed by 704 billion trapped inside a very hard type of rock known as shale, and 662 billion in the Middle East, according to the report. The rest of the firm's 3.7 trillion barrel total comes from untapped reserves in the deepest seas, the Arctic and places such as Canada's tar sands and Venezuela's Orinoco basin.

Fifth Time

``This is the fifth time that the world is said to be running out of oil,'' Yergin said in an e-mailed statement. ``Each time -- whether it was the `gasoline famine' at the end of World War I or the `permanent shortage' of the 1970s -- technology and the opening of new frontier areas has banished the specter of decline.''

Oil prices have climbed 24 percent in the past two years and touched an all-time high of $78.40 a barrel in July. Economic growth in China, India and the U.S. has boosted demand while hurricanes and militant attacks crimped production in some regions, including the Gulf of Mexico and West Africa.

Cambridge Energy Research Associates, which advises governments, oil companies and financial institutions on energy issues, is not the only skeptic of the peak-oil theory.

Stuart McGill, a senior vice president who oversees Exxon Mobil Corp.'s oil and gas business, dismissed the peak theory in a Nov. 1 interview as being without merit. Irving, Texas-based Exxon is the world's biggest oil company, pumping more crude than every member of OPEC except Saudi Arabia and Iran.

To contact the reporter on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net


Thursday, November 09, 2006

Chevron's Don Paul on the future of oil

Business 2.0 Magazine

As Big Oil celebrates a huge victory in California, Chevron's chief technologist talks to Business 2.0 about the end of oil, new energy sources, and the $4 billion tax voters shot down.

By Saheli S.R. Datta

Excerpt:

Are we running out of oil?

And if so, can technology really solve the problem? What I call unconventional fuels are going to be an integral part of meeting our energy demands over the next 20 or 30 years. That includes everything from the tar sands of Athabasca in Canada to biofuels to hydrogen. All of these involve significant advancements in the underlying science and technology. So the unconventional fuel business in many ways is all about technology.

But I would say first that exploration and production today is every bit as technologically intensive as alternative fuels. I remember in the late 1970s seeing my first truly 3-D image on a screen. It took a Cray supercomputer to display it. I said, "That's going to change the way we're going to do things." And, in fact, that's the case. It changed how we discover new oil fields. Nobody thinks about it today, of course.

But what's really striking is the advancement in the technology of molecular transformation. Remember back in the Middle Ages, you had kings who employed alchemists to turn lead into gold? That's a useful metaphor for what you can do today, with molecular science becoming so advanced. You hear about things every day on the biological side - genetic engineering, wondrous pharmaceutical development. In the energy business, we're in range of the same thing: the ability to take any kind of feedstock and synthesize the fuels you want.

That kind of alchemy is still ahead of us, but I don't see any impediments to getting there. So when people ask me whether we're going to run out of oil, I say, "Well, frankly, the real question you should ask is whether we're ever going to run out of fuel, and the answer is no." I find that pretty exciting.


Shell Oil president discusses new fuels, energy security

MIT News Office

By Deborah Halber

Shell Oil isn't just about oil anymore. The multinational company has invested $1 billion in wind over the last decade, owns companies working on solar and hydrogen technologies and will soon announce the acquisition of an entity that uses municipal waste to produce biofuel.

"With these, we could go a very long way toward meeting energy security requirements," according to John Hofmeister, president of Shell Oil Company. But conservation has to take hold "in our hearts, minds and behavior of who we are as a people. We have to teach our young people that energy is a precious commodity. We're doing a disservice to young people, because instead of teaching about energy, we're allowing ignorance to reign."

Hofmeister spoke on "Energy Security ... What Does It Take?" at the fall 2006 Hoyt C. Hottel Lecture in Chemical Engineering held at MIT on Nov. 3. The Hottel lecture, named for a former faculty member, is sponsored by the Department of Chemical Engineering and focuses on energy issues.

Hofmeister, who was named president of Houston-based Shell Oil in March 2005, said he represents "an industry some would say has all but zero credibility." Yet Shell, he said, is exploring new technologies to find untapped and unconventional oil and gas reserves, investing in alternative sources such as wind and solar and not simply "listening to its cash registers go ka-ching."

Consumers accuse Shell and other major oil companies of price gouging, a characterization Hofmeister feels is unfair in the current era of limited supply. Meanwhile, he said, the company goes "tin cup in hand" to beg legislators for more access to untapped domestic oil and gas reserves to make the United States less reliant on foreign oil.

Unlike others in the petroleum industry, Shell believes that global warming is a real issue, he said.

Even though Shell invests around 5 percent of its total budget in alternative energy sources, Hofmeister warned it will take 20-25 years before these fledgling technologies meet even 10-15 percent of the country's energy needs. The alternatives to fossil fuels are still based on "immature technologies" that markets are not quite ready for, he said.

Meanwhile, "I do believe energy security is at a point of national crisis," Hofmeister said, although Shell does not "subscribe to the theory" (based on work by geophysicist Marion King Hubbert) that world oil production will peak in 10-15 years.

More than 112 billion barrels of oil and gas--"more oil and gas than to be had in the entire Middle East"--can be tapped from federal lands on the outer continental shelf, offshore Alaska and from the Gulf of Mexico, he said. And while finding future oil in other places will be more technically difficult, technology will change the game. "Technology will help us not have to face this issue which peak oil suggests," Hofmeister said.

Even so, untapped reservoirs will not be enough to meet America's future needs, so Shell is pursuing unconventional sources in Canada.

The trillions of barrels of untapped oil and gas around the world present a "carbon management issue" that Shell would "at least like the opportunity to try" to address, he said. For instance, electrical utilities are committing to clean, efficient gas-turbine technology, but natural gas supplies are low compared with increasing demand. Meeting this demand for additional liquified gas would mean building regasification terminals that no one wants in their back yard, he pointed out.

Shell is working on creating a biofuels infrastructure in select markets in the Midwest to make ethanol available at the pump to vehicles that can use blends of biofuels. Although the United States plans to produce 7 billion gallons annually of ethanol by 2010, we would need to produce 15 billion gallons to meet even 10 percent of the country's transportation fuel needs, Hofmeister said.

"We think there needs to be more regulatory push and more market pull" for alternative sources to take hold, he said.

Shell would like to see a national framework of carbon management principles, Hofmeister said, and wants to be included in the debate "to help think through what different policy alternatives would be like."


The Peak Oil Crisis: Exxon & Peak Oil

Falls Church News-Press

By Tom Whipple

Every now and again, a senior oil company executive speaks optimistically to some august gathering about all the oil that is left. This time the honor fell to Stephen Pryor, president of ExxonMobil Refining. Speaking to a conference in Houston, Mr. Pryor stridently asserted that "energy resources are adequate to sustain growth— we are not peak oil people." At the mention of the bogeyman, "peak oil," the reporter covering the speech, or at least his editor, felt impelled to add a few words of explanation: "proponents of peak oil argue that the world has already tapped most of the easy-to-find deposits and that the drop in supplies combined with ever-growing demand point toward inevitably higher prices that will eventually hamper global economic growth." Actually, the reporter did a nice job in capturing the essence of peak oil.

The speaker then backs up his assertion by saying that the world has thus far produced 1 trillion barrels of oil and that there are still 4 trillion left. The average listener is left with the impression that oil shortages are centuries or at worst lifetimes away.

Of course, based on what we currently know about he earth's oil resources, the "4 trillion barrels left" is really a stretch bordering on irresponsible. The first 2 trillion are supposed to be reserves of conventional oil. This number is based on a badly flawed US Geologic Survey study produced a few years back that attempted to estimate the world's remaining conventional oil resources.

The major flaw was the authors' assumption that existing and not-yet-discovered fields would eventually turn out to contain much more oil than originally estimated. While it was true many decades ago that the ultimate size of newly discovered oil fields was often seriously underestimated, modern geologic techniques have markedly reduced initial overestimates.

The usual answer to the "we have 2 trillion barrels left" assertions is to ask, "OK just where is it?" If there are really 2 trillion barrels of conventional (the kind that comes out of a well) out there, why are we only finding 4 or 5 billion new barrels a year while consuming 31 billion barrels?

This question is always answered with an evasive reply or silence, for there is no answer. The earth has been surveyed time and again with increasing sophisticated geological surveying equipment. The widely-touted 2 trillion barrels left is growing less and less likely with each passing year.

To throw in shale and tar sands as major sources of oil is also becoming less and less likely. We have yet to figure out how to get the "oil" out of shale in an economical and environmentally acceptable fashion. The latest proposal is to lower some flavor of a microwave oven down wells into the shale beds in order to melt out the "oil" using radio frequency energy. It just might work someday, but odds are it will be a very long time before we see millions of barrels a day poring out of the Rockies.

The Alberta tar sands are currently producing about 1 million barrels a day (b/d) of the world's 85 million (b/d) of oil production. As North America runs short on natural gas to cook the tar out of the sands and water to move the mess to processing plants, very large increases in production from the tar sands seems less and less likely no matter what the price of oil.

If Canadians can stomach the environmental mess that exploiting the tar sands is making, they might get another million or two barrels b/d out of the project, but the tens of millions of production per day needed to replace depletion of conventional oil seems highly unlikely.

Someday soon it will be obvious to all that the "4 trillion barrels" of reserve exist only in the minds of Exxon speechwriters and not in the ground. To keep repeating this fable may be good for Exxon's stock and the morale of its employees, but it certainly is not helping America prepare for oil depletion.

The second theme of the "there is plenty of oil" speech is more subtle and in effect negates the primary argument. Immediately after asserting that we at Exxon "are not peak oil people," Pryor went on say "however, access to these (resources) will require large investment and governments will have to allow access." Or put another way, as long as energy companies are given access to oil fields and have an incentive to invest in new technologies, we can meet the world's needs.

In other words, Exxon says there is plenty of oil underground, but unless they are allowed to drill for it, bring it to the surface, and sell it at an acceptable profit, all bets are off. The world might just get its peak production despite those 3 trillion barrels of reserves just waiting to be exploited.

With this caveat, Exxon is getting a little closer to admitting to reality and the proximity of peak oil. Most of the remaining oil is in: Saudi Arabia, Iran, Iraq, Kuwait United Arab Emirates, Angola, Nigeria, Libya, Algeria, Sudan, Russia, Kazakhstan, Azerbaijan and Venezuela. Only nine percent or so of the world's remaining conventional oil is in nice safe places like the Gulf of Mexico, Canada, and the North Sea, where there are no civil wars, corruption, or nationalistic governments bent to tossing out the International Oil Companies.

Now why should we really care if Exxon runs around making speeches and buying newspaper ads proclaiming there is plenty of oil left? Other oil companies are doing the same though not quite as stridently, while a few are becoming much more cautious. Well, here is the problem.

It seems that a year or so ago the US Government, Energy Secretary Bodman to be specific, became concerned about all the peak oil talk that was starting to float around in the media so the government decided to conduct the most comprehensive, thorough, definitive study of the future of energy resources every performed.

To carry out this task, they turned to the National Petroleum Council, which was set up in 1946 to advise the government on matters pertaining to petroleum. The study is due out in the second quarter of 2007 and is to answer what may be the most important question of the 21st Century— "What does the future hold for oil and natural gas supply?"

An elaborate hierarchy of committees, subcommittees and task groups has been formed. Some 200 researchers are said to be working away on this complex and incredibly important problem. When all the research is done and all the conclusions are reached, the results will be forwarded up the hierarchy to the Chairman of the study who turns out to be none other than Lee Raymond, recently retired CEO of, you guessed it, ExxonMobil and implacable foe of the concept of peak oil. It is going to be an interesting year.

In the meantime, disingenuous speeches by senior US oil company officials resulting in headlines like "Exxon Sees Plenty of Oil to Meet Increasing Demands" are not helping the situation.


Wednesday, November 08, 2006

Peak oil and global warming

Daily Reckoning

...Global warming is the other side of the coin of Peak Oil. That is, in the process of rapidly depleting the Earth's supply of fossil fuels, mankind is also playing a life-threatening experiment with the Earth's atmosphere...

By Byron King

- The intellectual content of the Association For The Study Of Peak Oil And Gas (ASPO) conference was truly like taking a drink of water from a fire hydrant. I mean it. There was so much there that I was learning something new with almost every presentation.

- The first evening of the ASPO conference kicked off with three lectures on the subject of global warming (GW). Why global warming? Because it is what you get when you burn up lots of fossil, carbon-based fuels and load the atmosphere with excess levels of carbon dioxide (CO2).

- GW is the other side of the coin of Peak Oil. That is, in the process of rapidly depleting the Earth's supply of fossil fuels, mankind is also playing a life-threatening experiment with the Earth's atmosphere. Life-threatening? You had better believe it. If you are not worried, get worried.

- Dartmouth professor and climatologist Cameron Wake gave a presentation about the current buildup of CO2 in the atmosphere. Wake's research includes reviewing more than a century of very accurate, chemical measurements of atmospheric CO2, a period that covers the vast majority of the industrial era.

- As one might expect, CO2 levels have increased dramatically over the past century as coal, oil, and natural gas have been burned in immense quantity and scope. Recent figures for CO2 releases, including the breakneck industrialization of China and India, yield charts that accelerate upward on a skyrocketing trajectory.

- Wake also made reference to Antarctic ice core measurements, in ice strata dating back about 420,000 years, analyzed by Russian, European, and US scientists. The bottom line is that CO2 levels have increased dramatically in the past century, to levels experienced, by comparison, only during the warmest interglacial periods during the past half million years.

- This has contributed to a consistent pattern of surface warming, on land as well as at sea, in the form of ocean warming. There have been measurable alterations to climates across the world, to include a measurable increase in the rate of ice melting in Greenland and Antarctica. So no, dear readers, "climate change" is not just some Internet conspiracy. It is empirically demonstrable.

- Wake's research on the climate of New England and the Canadian Maritimes has demonstrated relationships between increased CO2 and increased temperatures, and an increased occurrence of "extreme weather" events, such as longer droughts and more intense periods of rainfall and snowfall when the droughts break. This has ominous implications for agriculture, forestry, flood management, emergency planning, and general public safety.

- Harvard geology professor and former MacArthur Fellowship recipient Dan Schrag picked up where Wake left off. Schrag, a geochemist by training, noted that CO2 levels are rapidly increasing due to man-made causes, to levels that the Earth has not experienced in almost 30 million years, meaning since Eocene times.

- Back then, there were no ice sheets at all in the polar regions of the Earth, and fern trees and critters like alligators actually thrived where now there is only ice. Sea level was more than 200 feet higher than it is today, what with immense amounts of water presently locked up in ice sheets, and the "thermal shrinking" of the world's oceans at the current, relatively cooler temperatures.

- The immense problem with all of this is that mankind is fundamentally altering the character of the Earth's atmosphere in the course of a mere century or so, and changing an atmospheric system that has otherwise taken hundreds of thousands, if not millions, of years to evolve.

- This constitutes an irreversible experiment with the Earth's atmosphere, and on a planetary scale. "Yes," said Schrag, "science is uncertain about a lot of what is happening. But most of what we do not know about these rapid changes in conditions is dangerous."

- Just a few feet of rise in sea level, which could occur in as little as 20 years if the Greenland ice sheets melted, would convert vast tracts of the world's coastal areas into uninhabitable tidal zones. And Schrag believes that the ice of Greenland will eventually melt, probably sooner than later. Unless you are rather elderly, you will probably live to see it. Things could, of course, be worse, depending on how a great number of related and dynamic natural systems play out.

- Schrag noted that GW and climate change make up more than just an environmental issue. It is a critical economic and national security issue. It is of such importance as to be beyond a partisan issue, and Schrag believes that GW and climate change will (or at least certainly should) become major issues in the 2008 presidential election.

- Yet this is one issue that is now barely on the radar screen of the world's policymakers, but is simultaneously an overarching issue that transcends what are otherwise considered the issues of supreme national interest of nations across the world.

- Is there a solution to the GW problem? Certainly not in any short-term sense, and probably not in the medium term. There is far too much economic and political momentum for mankind to stop, let alone to reverse, the trends toward using more and more fossil fuels going forward (other than Peak Oil, of course). And much of the CO2 that has already entered the atmosphere has not even begun to reveal itself in observable changes to climate patterns.

- A quick rundown of Schrag's proposed policy solutions carbon-based fossil fuel with carbon-neutral, if not carbon-free, energy sources. Energy production will have to trend rapidly toward renewable energy, with nuclear power included in the mix.

- Another presentation in the GW theme of the first evening of the ASPO conference, by an energy economist named Charles Komanoff, focused on how to make markets work to address carbon emission issues.

- Komanoff went through a series of mathematical explanations that were remarkable in demonstrating how relatively low-cost some of the policy solutions might really be. With a "carbon tax" on all fossil fuels (coal, oil, natural gas) at the equivalent of about $1 per gallon of gasoline, it is possible to envision a stunning amount of change in energy usage patterns, and in the increased use of carbon-mitigating technology such as wind power and photovoltaic systems.

- Yes, changing energy technology will cost a lot of money. But then, mankind burns a lot of carbon, so a carbon tax will also raise a lot of revenue and alter a lot of behaviour at the margin.

- Komanoff was careful to emphasize that carbon taxes are, in essence, "use taxes," that force people who add carbon to the atmosphere to pay for the deed. Thus, the people who are using the most carbon-based energy, and thereby contributing the most to GW and by implication drowning the world's coastlines with Greenland and Antarctic ice melt, will be the ones who pay for it.

- And any revenues raised by government entities through carbon taxes should be offset, according to Komanoff, with tax reductions elsewhere, such as in reduced payroll taxes.

- Well, I sure wish that it were that simple, but all of you who are reading this probably know that it is not. Global warming and climate change is empirically demonstrable, and a serious issue that will both literally and figuratively alter the world for the rest of all of our lives. No one will outlive it. And you cannot buy your way out of it.


Draining Canada first

Rock River Times

By Michael Vickerman

Sating America’s prodigious energy appetite depends on the continued availability of Canadian energy sources. About 25 percent of the crude oil and 80 percent of the natural gas imported into the United States come from our very accommodating neighbor to the north. More than half of the fuel pumped out of Canadian wells heads south to keep us Yankees warm and happily tooling about on our highways.

Even though the Canadian economy is no less dependent on hydrocarbon energy than ours, Canada has been drilling as many wells as necessary to keep the high-maintenance American economy humming. If this pedal-to-the-metal production policy were applied to a non-strategic product like, say, maple syrup, few people would care about the consequences. But there is nothing on the horizon to replace the nonrenewable high-density energy sources that Canada so generously sends our way.

This begs the question: how long can Canada go on behaving like America’s most obedient energy colony?

Not very long, according to David Hughes, a researcher for the Geological Survey of Canada. Speaking before the World Peak Oil Conference held in Boston, Hughes painted a remarkably pessimistic picture of Canada’s energy future, especially regarding natural gas.

Despite record drilling activity, natural gas extraction volumes have slipped from the peak set in 2002, and output per well is now declining at an annual rate of 28 percent. Put another way, energy companies must add 3,000 more wells in 2007 on top of the 15,000 now in production just to keep output from diminishing.

That would be a daunting challenge even if there were spare rigs and drilling crews standing by. As it now stands, there is no spare capacity of this sort anywhere in North America.

With only eight years of proven reserves left in Canada, Hughes suspects that natural gas output is about to fall off a cliff. Barring a miracle or two, Canada will soon experience challenges in providing for its own citizens, let alone producing surplus volumes bound for American furnaces.

A potentially wrenching resource conflict is now brewing on our continent, thanks to the North American Free Trade Agreement (NAFTA), under which Canada effectively gave up sovereignty over its fossil energy inheritance. As a signatory, Canada is prohibited from cutting back energy exports, even in the event of a domestic supply crunch. But how long would Canada honor its obligations under NAFTA if doing so resulted in its citizens freezing to death? American policymakers would be wise to explore how that scenario might play out.

If that weren’t enough, natural gas is also the key to expanding the production of oil from the tar sands of northern Alberta, the only oil-producing region left in North America that can increase output. The natural gas is the only available fuel for producing the pressurized steam needed to separate bitumen, a low-grade oil, from sand. Shrinking natural gas supplies would quickly reduce the flow of bitumen into the U.S., further complicating Canada’s energy dilemma.

The irony of sacrificing a premium energy source to make more low-grade fuel for export was not lost on Hughes, who closed with a quote from a Canadian energy executive. “Using natural gas to produce oil from tar sands is akin to turning gold into lead.”

Vickerman is executive director of RENEW Wisconsin, a nonprofit organization promoting conservation and renewable energy sources.


Tuesday, November 07, 2006

Enlightened Survivalism

EnergyBulletin.net

By Norman Church

A prudent man foresees the difficulties ahead and prepares for them;
the simpleton goes blindly on and suffers the consequences.

- Proverbs 22:3



It would seem that some people think that debating and having a say in trying to solve some of the problems of this world, and I am thinking particularly of Peak Oil and Global Climate Change, have nothing to do with ‘survivalists’ or ‘survivalism’. Some say that they ‘have not got the time for survivalists’ while others are ‘not very enthusiastic about survivalism’. So let me give a ‘survivalist’ view.

Let me start with a definition from the Wikipedia encyclopedia

A survivalist is a person who anticipates a potential disruption in the continuity of local, regional or worldwide society, and takes steps to survive in the resulting unpredictable situation.’………..

The Roots of ‘Survivalism’

The roots of the modern survivalist movement can be traced to several sources, including government policies, religious beliefs, and writers warning of social or economic collapse. In the Cold War era government civil defence programs promoted public atomic bomb shelters, personal fallout shelters, and training for children, such as the Duck and Cover films.

Howard Ruff warned of socioeconomic collapse in his 1974 book Famine and Survival in America. Most of the elements of survivalism can be found here, including advice on storage of food. Newsletters and books on the topic of survival followed the publication of Ruff's book and in 1975 Kurt Saxon began publishing a newsletter called The Survivor, which combined Saxon's editorials with reprints of old 19th century and early 20th century writings on various pioneer skills and old technologies. Kurt Saxon used the term "survivalist" to describe the movement, and he claims to have coined the term.

Another important newsletter in the 1970s was the Personal Survival Letter published by Mel Tappan who also wrote Tappan on Survival. He became an influential leader of the Survivalist movement.

Interest in the survival movement was renewed in 1999 by fears of the Y2K computer bug and many books have been published in the past few years offering survival advice for various potential disasters, ranging from an energy shortage (Peak Oil) and crash to nuclear or biological terrorism. In addition there are now information channels such as SurvivalBlog and many online survival websites which discuss all aspects of ‘survival.’

One main tenet of the survivalist movement has been that people should prepare on their own or with like-minded people and not rely on the government to take care of them in emergencies.

Some who do anticipate and advocate preparation for response to a serious depletion of non-renewable resources are critical of survivalists on the grounds that their approach engenders paranoia and suspicion in contrast with preservationist approaches that increase cooperation and increase the likelihood of long-term sustainability.

What is ‘Survivalism’

But even so what exactly is ‘survivalism’ and what and who are ‘survivalists’.

Survivalism is a philosophy - a way of life - and it is as varied in its methodology as the worlds’ religious or political theories but contrary to popular opinion, it is not an "activist" tautology.

Most survivalists are reserved and quiet individuals who have lost faith in society’s ability to protect its own, and who have taken steps to lessen their dependence upon society for aid in an emergency situation.

Survivalists also realise that modern society is a long and twisted chain of interdependency and that each link of this societal chain is dependent upon every other link to maintain its integrity. At various points within this chain are links that provide the rest of the chain with food, shelter, power, water, communications, transportation, and medical and physical protection. Should one or more of these links fail, those placed before and after the broken link(s) may find themselves without these necessary resources. Should enough of these links be broken, the entire chain may collapse.

They attempt to reinforce the chain of society by strengthening their own links. Many do this by actively learning and practicing the necessary skills to provide or obtain the basic necessities of life for themselves, their families and their friends.

They learn to build and maintain their own homes, provide their own clothes, find, store and purify their own water, establish and maintain their own communications and transportation. They learn to grow, hunt or gather their own food and how to process and store it. They learn to maintain their health through diet and exercise, and how to avoid or handle basic injuries and illnesses. And yes, they learn to defend themselves from aggressors when there is no one else there to protect them.

Survivalism does not necessarily concentrate on global catastrophe or the collapse of civilization. The profile of a "true" survivalist is someone who is concerned with planning for and avoiding the pitfalls and dangers of daily life and short-term emergencies and disasters of a local and temporary nature. In fact, since the frequency and likelihood of personal and local emergencies are more common, these situations are of primary concern.

Long term and widespread disasters are also of concern to the survivalist, but they are extremely difficult to plan for. The individual (or single family) often does not possess the resources - financially, materially, or intellectually - to efficiently plan for a long term, widespread disaster.

Our ancestors.

When I think back to our ancestors and I think of all the knowledge they had to have to simply live it amazes me. They had to know: which plants make anything from rope to medicine, which rocks makes sparks, which can be sharpened, which can be used to break other rocks, which trees are best for all their needs, the habits of animals, the weather, weaving natural materials into clothing and tents. It truly is mind boggling especially in juxtaposition with the specialized modern mind who barely can cook with a microwave. Even after a little bit of study you have a hard time saying the word "primitive", because the level of skill involved is really beyond anything modern man can comprehend.

Survivalism also enriches your life by giving you the abilities to know you can create from just what is there in nature. What could be more empowering? Though we would be hard pressed to become proficient in all these areas I do think it is important to study and attempt as much as you can.

A true survivalist hopes deep in their heart that the good life never ends for anybody. They just know that trouble sometimes does happen, and want to be as well situated as they can be if bad things do come to be.

A fireman is a fireman, not because he believes everything will burn, but because he believes much can be saved. Doctors don't believe in death, they believe in life, and a survivalist is not a survivalist because he believes everything must be destroyed and everyone must die, he believes that life and freedom can be saved, if people of good will are prepared. A fireman does not start fires, a doctor does not make disease and a survivalist does not make disaster.

Crime, disease, war, revolution, fire, flood, periodic financial collapse and famine, Peak Oil and Global Climate Change are the results of nature and the nature of man and unfortunately are not within the power of anyone on this earth to prevent. It is not inherent in the nature of man to be able to solve these problems, we can’t even get our governments to work together and least of all we can not get our leaders to be honest. So come on be realistic.

We all know that the sun will set each day, leaving us in darkness and we all know that warm summers give way to cold winters and that we can do nothing to keep the sun from setting or the cold winds from coming.

Why is a ‘Survivalist’ a loony?

So then, why is the survivalist thought of as a loony when he makes ready to face events that are just as much a part of history and nature as the sunset and the changing of the seasons.

We survivalists have loved ones we don't want to see hurt or killed, we have homes we don't want to see destroyed, we are not fools to think that just because we are survivalists a world cataclysm would be fun for us or that we would not experience danger, loss, hunger, injury, cold or even despair and death.

No, we will not be disappointed if there is no disaster to survive, anymore than the Red Cross is disappointed when there are no floods and storms or the man who buys an insurance policy is disappointed when his house fails to burn down.

It is most regrettable indeed, that many people consider survivalists as a threat and regard them with suspicion and even hostility. I suppose this is not really surprising when the press and media plug at the ‘Rambo’ type as being the typical ‘survivalist’. This attitude is logically indefensible and is rooted in the nonsurvivalists own sense of fear and guilt. Subconsciously, the nonsurvivalist may hate the survivalist for reminding him of how fragile his lifestyle is.

An intelligent approach to survivalism would recognize that while individual efforts and skills are important, it is vital for people to survive as a group and that for such survival, in-depth organization will be necessary.

Short-term survivalism is a brief struggle for life, with the ultimate goal of returning to a normal or nearly normal situation. Some examples are:

* Keeping yourself alive after becoming lost in the woods.
* Keeping yourself and your passengers safe when your car becomes stuck in a blizzard.
* Surviving long enough to be rescued after you've broken a leg hiking.

You can see from this list that it's not inconceivable for a normal person to be in a short-term survival situation. If you engage in any outdoor leisure, it's a good idea to learn a little about short-term survivalism.

Long-term survivalism is an extended struggle for life, with little or no hope of returning to a normal or nearly normal situation. Some examples of long-term survivalism are:

* Heading to the woods after a societal collapse.
* Getting lost in a vast wilderness area, such as Alaska or the Amazon.
* Being stranded in an undeveloped country, days or weeks away from help.

With the exception of a societal collapse, you'd have to go out of your way to find yourself in a long-term survival situation. The survivalist is simply being prepared for a short- or long-term situation where you must be self-sufficient.

Lets get the facts right.

Now, let's get the facts turned around right. Every person who has not made provisions for surviving without food, water, fuel and other essential needs from the outside is a mortal danger to his neighbours.

What will a man do when he and his family are freezing, hungry, thirsty, sick and starving? He may ask or beg his neighbours for help, but when they have no extra fuel, food, water or medicine to give, will he just go back home to die with his wife and kids? What do you think?

We survivalists who stock up, which is not the same as hoarding, on food and other supplies now do a favour to society because what we now buy is replaced on the shelves, so there will be that much more available in an emergency. We survivalists won't be looting and killing for food. We won't be as much a burden on the medical facilities or a danger to the police. Since we will be able to turn to each other and will not need to turn on anyone, we may even be able to help at least some others.

Survival preparation should be regarded as a social obligation, one that every individual owes to his family and community and his nation.

So the reality is that survivalists are generally self-reliant individuals, who cannot help but see the imperative of preparing for the worst possible events, while hoping sincerely, and many also pray, that they won't happen. Today's survivalist is an asset, to his community and to the world and should be proud to be called SURVIVALIST.

Compiled by Norman Church.


Thursday, November 02, 2006

Election, economy and the price of gas

SeattlePI

By Robert Weiner and Richard Bangs

Enjoy the price of gasoline now, because when the Saudis lower production, we could go right back to the $3 nightmare of three months ago. Washington state is especially affected -- regularly in the top 10 highest, 20 cents a gallon more than the national average ($2.42/gallon vs. national average $2.22 last week).

The gas prices crushing consumers dropped 80 cents a gallon since August. President Bush said, "That's good news for the American consumer." But there is more to the price changes than meets the eye.

Something Washington Post journalist Bob Woodward said two years ago while prices were going higher sends chills: "They could go down very quickly. That's the Saudis' pledge." According to Woodward, Prince Bandar bin Sultan, Saudi Arabia's ambassador to the United States, "told President Bush that the Saudis would cut oil prices to ensure a strong economy for Election Day." This prediction has come to fruition.

U.S. oil company executives also possess the power to allow price drops for the election. They have enough room to play -- including last year's collective $100 billion in record profits and Exxon Mobil's own near record $10.6 billion profits this past quarter. Oil executives are full of fear over new leadership in a Congress that would investigate them.

They are particularly afraid of Rep. Charles Rangel chairing the Ways and Means Committee. Rangel could ask: Why do companies that generate record profits from U.S. consumers receive $7.2 billion in government subsidies? Why was U.S. Rep. Tom DeLay, R-Texas, then Republican House leader, allowed to hold open a five-minute floor vote in the House for 48 minutes until some $2.6 billion in tax breaks for the major oil companies were approved by a two-vote margin? Just this week we learned of the administration's refusal to pursue hundreds of millions in fees for offshore drilling. Why?

Those policies defy basic logic until we look at the $32 million in contributions from oil representatives given to Republican congressional and presidential campaigns and the Republican Party during the 2004 and 2006 elections (versus $7 million to Democrats), according to the Center for Responsive Politics.

NBC News Anchor Brian Williams pointed out, "There are skeptics and cynics out there who say there's nothing to make voters happier than paying less for gasoline, and they're going to wonder: Did somebody just open a big spigot?"

An "improved" economy is a political boon to incumbent legislators. The Dow Jones high has appeared when gas prices on average dropped nearly 80 cents. It's as though the U.S. doesn't want to know why the prices are declining; we're just too happy about it to care.

The U.S. could again be frustrated when the Saudis and oil executives close the spigot after the upcoming elections. Maybe then we'll want to know why the gas prices arbitrarily fluctuate.

Robert Weiner was a senior public affairs director in the Clinton White House and spokesman for the U.S. House Government Operations Committee. Richard Bangs is a senior policy analyst at Robert Weiner Associates, weinerpublic.com.


Wednesday, November 01, 2006

Whatever happened to Peak Oil?

ITPBusiness.net

By David Ingham

Just one year ago, we were all beginning to think that the end of oil was fast approaching. According to a growing chorus of industry watchers, we either had or were about to reach something called ‘Peak Oil’, the point at which the amount of oil left in the ground is less than the amount that humankind has already extracted.

In other words, over half the oil that history left in the ground for us has been, or was about to be, consumed. Renewable energy was the phrase of the day and even the big oil majors were talking about a future after oil. Does anyone remember the following words?

“We need your help. There are many factors in the new energy equation, and we encourage you to consider all of them. We call upon scientists and educators, politicians and policymakers, environmentalists, leaders of industry and each one of you to be part of reshaping the next era of energy.”

This was none other than the voiceover from a Chevron Texaco ad campaign from just one year ago. So what happened? Have we just lost interest, or has the world suddenly discovered more oil that it didn’t know was there before. The way people talk, you might be tempted to think so. Kuwait, whose production has hovered around the 2.6 million bpd mark for a long time, is now talking about raising production to 4 million barrels per day.

Saudi Arabia, which may or may not still be the world’s largest producer, is supremely confident that it can boost daily output to 12 million barrels per day from the current figure of around 9 million bpd. It has even told us where it thinks most of the production is going to come from.

Saudi Aramco has also spoken before about the possibility of boosting production to 15 million barrels — through the utilisation of new recovery techniques and by searching for oil in previously unexplored areas of the enormous country.
Let us also not forget the oilsands of Canada’s Alberta province. Current estimates put the number of barrels there at a phenomenal 1.7 trillion, although only 200 billion are deemed ‘recoverable’ with current technology.

Just a few years ago, however, there was little interest at all in these deposits as the cost of recovery was deemed too great. Now, the area is booming as the cost of recovering oil from the Athabasca sands has plummeted and the price of a barrel has rocketed. Who is to say that all that ‘unrecoverable’ oil won’t become recoverable in the future as technology advances?

In fact, tar sands represent as much as 66% of the world’s total reserves of oil, when the 1.7 trillion barrels in the Athabasca sands and the 1.8 trillion barrels in the Venezuelan Orinoco sands are added up.

The last year has also seen growing interest in gas recovery. Qatar’s massive investment in its gas reserves has well been documented and has brought that small country unimaginable prosperity.

Egypt is pulling out the stops to develop its gas reserves, whose size has been constantly revised upwards, and is looking at ways of reducing domestic consumption so it can exploit the export potential of this new windfall. From a level of 36 trillion cubic feet (tcf) in 1999, ‘proven reserves’ have doubled up until now and could soon go past the 100 tcf mark.

Even Abu Dhabi, which is swimming in oil reserves and has massive investments abroad, believes it is time to begin commercial exploitation of its sour gas reserves. Natural gas reserves are currently estimated at around 200 trillion cubic feet and the key driver for their exploitation will be rocketing domestic demand.

Of course, all this extra exploration may be good for the world’s emerging economies, but it simply delays the inevitable truth that the world will one day run out of oil & gas. Peak Oil will happen eventually. It just may not happen as soon as we used to think it would. That inevitably means that the search for clean and cost effective alternatives to fossil fuel is likely to be delayed still further.