Peak oil & prices - July 20
by Staff
Click on the headline (link) for the full text. Many more articles are available through the Energy Bulletin homepage
... But today it isn't because I am star-struck that I am terrified; it is because the oil man is telling me the opposite of everything he should say. Over the tinkle of teacups, he is predicting the end of civilisation. My friends give me uncomfortable looks about my new film, Burn Up, because I have a Cassandra-like reputation for writing fiction about things that later become fact. ... I'm not boasting: I just listen to experts who prove frighteningly accurate. Burn Up - starring Rupert Penry-Jones, who played Adam Carter in the hit BBC series Spooks - is about the moment runaway climate change collides with an unprecedented oil crisis. ... Once I had decided to write a drama about climate change I spoke to everybody who was prepared to talk. Surprisingly, this turned out not just to be the usual environmental suspects such as Greenpeace, Friends Of The Earth or WWF, but people in the oil industry. And these weren't disaffected whistle-blowers, but some senior figures who were prepared to step out of the shadows and tell me just how scared they were. The oil man predicting an apocalypse was one of them. I had gone to his office expecting him to tell me global warming was at best an uncertain science based on dodgy data, at worst a Left-wing conspiracy designed to tax us all to death. ... I cleared my throat, and nervously suggested that Sir John Houghton, the scientist who led the first Intergovernmental Panel On Climate Change, had told me we had at best ten years to stop the increase in global temperatures, otherwise we were in danger of runaway climate change. Ten years tops. Not 40. The CEO stopped in his tracks. 'Oh, you've talked to him, have you?' His tone changed. He sat down heavily and said: 'Well, I know John and he's right, and if you want to know what I really think, I think we're fiddling while Rome burns.' He was the first of many to come to the confessional. People who for the sake of their careers shouldn't even have returned my phone calls were opening their hearts to me. Why such dangerous honesty towards a writer? ... As I dug around the oil industry, I came across another extraordinary elephant in the room that nobody dared mention, but which will become crucial in the fight to prevent irreversible warming: Peak Oil. This is what they call the moment when we start running out of the stuff. When I started on this journey, three years ago, oil was 50 dollars a barrel and the Peak Oil theorists were dismissed as alarmist fringe elements. We were apparently at least 50 years away from Peak Oil. Anyone who dared to say different was simply laughed at. But then I met a man employed by the oil industry to collate data on oil reserves, and he told me that already we are not producing enough oil to meet demand, and even if output were increased, it would be used up by growing demand from China and India. So, I asked, what did this mean? 'A global crash,' he said, 'at a guess somewhere between 2008 and 2010.'
That's the day when we hit the tipping point, when demand for oil exceeds the supply. Like it or not, oil fuels the engines of industrialized economies. In California, we burn through nearly 20 billion gallons of the stuff each year just driving around. Then there's the oil we use to grow and transport food and pump water, the oil that fuels planes, trains and cargo ships, and the oil that is embedded in every computer, every inch of asphalt and every bit of plastic. So imagine my surprise when I learned that oil supplies are running out - and that the federal government is doing nothing to prepare for it. Speculation regarding the human impact of oil shortages runs the gamut from a deep recession to a second Great Depression to widespread famine and social disintegration. As an urban dweller with two kids, a 40-square-foot yard and little ability to keep houseplants alive, much less grow my own food, words like "famine" and Web sites like www.dieoff.org tend to hit my panic button.
Edward F. Stanfield, 77, and his son, Edward B. Stanfield, 49, have followed this oil-inspired choreography for decades on their 600-acre farm in the Randallstown area of Baltimore County. Like farmers around the world, they grow their hay, corn and soybeans with petrochemical fertilizers and pesticides, harvest them with diesel combines, pack them with oil-based plastic and ship them in diesel trucks. The mechanized "Green Revolution" the family joined after World War II created an explosion in food productivity that allowed global populations to multiply. But it also forged a dependence on oil that could now lead to a food crisis, a small but growing number of scholars and activists warn. Dr. Brian Schwartz, co-director of the program on global sustainability and health at the Johns Hopkins Bloomberg School of Public Health, said governments should start planning for a worst-case scenario, with soaring oil prices disrupting food supplies, just as they plan for other possibilities like nuclear war and bioterrorism. "We have an industrial model of food production that requires intense amounts of fossil fuels," Schwartz said. "Food is going to be a huge problem for us." Dale Allen Pfeiffer, author of the recent book Eating Fossil Fuels: Oil, Food and the Coming Crisis in Agriculture, goes even further in his warnings. With global oil production soon sliding into decline, fuel prices might continue to skyrocket until the world's food system collapses, causing starvation, he wrote.
So: the basic point is that the price elasticity of oil demand is very low in the short run, but gets bigger once people have time to adjust - to buy more fuel-efficient cars, to rearrange their commute, etc.. Right now we obviously face oil prices much higher than people were expecting when they made decisions about things like car purchase, so the quantity demanded will fall over time even if the price stays where it is.
But the search is still on for new sources of oil. Is U.S. oil shale the answer? Maybe not, since it’s pricey and has a big environmental impact, at The New Republic. And offshore drilling? The WSJ reports (sub reqd.) that Senate Democrats are increasingly coming under fire to consider a compromise on expanded drilling. But environmentalists opposed to more drilling may have a big weapon in their hands: Not head-in-the-sand denial, but careful cost-benefit analysis that could show offshore drilling does more harm than good, at Grist. That’s the OECD’s line on biofuels in a new report out today, Reuters reports in the Guardian. The rich-country club says nations would be better off pouring money into energy-efficiency schemes instead. But don’t tar all biofuels with the same brush, a Guardian op-ed retorts: With the whole world suddenly debating biofuel policy, now is the time for careful decision-making. |
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