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Preparing for Peak Oil - a new report from ODAC
Oil Depletion Analysis Center (ODAC)
ODAC has prepared a Peak Oil report aimed specifically at local government in the UK called Preparing for Peak Oil (PDF, 528 Kb). From the report Policy Summary:
The purpose of this report is to summarize which authorities are doing what, and to draw together the most promising polices for tackling peak oil, so that all British local authorities can benefit from best practice being developed both at home and abroad. Almost every area of policy is affected, from public transport to planning, and the report is especially relevant for councils affected by the planned expansion of Britain's airports: mass air travel could be an early casualty of peak oil. The suggested policy changes are usually complimentary to those required to combat global warming, but there are also important distinctions that may affect the conclusions drawn by local authorities. This is particularly true of natural gas, where supply difficulties are also expected in the relatively short term. But whatever the motivation of a particular council - climate change or peak oil - many of the suggested policies would also reduce expenditure almost immediately simply by saving energy.
Copies of the report can be ordered, free of charge, from ODAC for either members of local government, or Councillors. e-mail: firstname.lastname@example.org (please give details of your role) or telephone: 01224 - 631 697.
From the report:
Global oil production is approaching a peak, an event which many analysts expect to happen between now and 2015, and which will be followed by a sustained decline. This problem will be exacerbated by a severe shortage of oil and gas workers for at least the next ten years. It will radically change the way our societies are run - our transport systems, how we produce food, where we live, how we shop, our social and educational lives.
There are a great many things that councils must do, and policies that need to be changed, if we are to have any chance of mitigating peak oil. On the plus side, some of these initiatives already exist (recycling, road pricing etc.) but these efforts need to be significantly expanded, and there remain entire areas of policy that have yet to be addressed.
The continued expansion of new road and air infrastructure no longer makes any sense. The current forecasts of a massive increase in air and road travel over the next thirty years are based entirely on historical data, and may soon be rendered meaningless by peak oil. New airport terminals and major road developments run the risk of turning into expensive white elephants. Instead, we must start preparing for a probable contraction in all travel modes that depend on crude oil.
Food supplies should be of primary concern. Prices are already increasing globally because of the rush to grow crops for biofuels, especially in the USA. There will be increasing competition for limited land and biomass between the food and fuel sectors as oil production declines. These effects are already being seen today, and the dilemmas they pose will only sharpen in future. In a world of constrained transport, food security will increasingly depend upon local supply. We need to start planning for the changes now.
The most fundamental change needed is in the way people think. Local policy is fundamental to the transition to a lean-energy future, but councils cannot achieve everything by themselves; the necessary changes will require much greater co-operative spirit within and between communities in future. Hearts and minds are critical, and we have very little time left in which to change them.
Global Peak Oil and Dollar
Emre Iseri, Turkish Weekly
Lately, we have been witnessing fluctuations of dollar and oil. This has led us to question the link between the dollar and oil and also whether this link still serves to the interests of the United States (US).
In the 1960s, the emergence of Western European countries and Japan as economic rivals caused the US to start operating a trade deficit, which reached its most critical levels in the late 1960s [background on the oil-dollar link]
.... To put simply, oil replaced gold as the backer of the US dollar by creating an artificial demand, sustaining, and reinforcing its central role in the global economy.
For the sustainability of this dollar-oil link, oil prices should be reasonable and stable. Otherwise, this link will cut down and be shattered. In that regard, one should acknowledge arguments that propose we are coming to the age of ‘global peak oil’. The term ‘peak oil’ denotes the date after which the rate of oil production is predicted to enter terminal decline. This simply means that the world is running out of cheap oil. The world economic system has been based on the supposition that oil would always be available cheaply. However, industry estimates indicate that a global economic crisis will soon occur precipitated by dramatically rising oil prices. Moreover, it is estimated that continued price increases will become a structural problem. Therefore, IEA’s warning regarding tightening of supply in oil markets is meaningful.
Even though it is not possible to detect the exact time of global peak oil, it is possible to determine its possible disastrous implications for dollar.
(13 November 2007)
Have Global Stock Markets Peaked on “Peak Oil?”
Gary Dorsch, Editor, Global Money Trends via GoldSeek
For the vast majority of Americans who usually don’t follow trends in the crude oil futures market, the Global “Oil Shock” only caught their attention after gasoline prices suddenly jumped 25 cents a gallon at the pump this month, and about 80 cents more than a year ago. Last week, West Texas Sweet crude oil surged to an all-time high of $98.62 /barrel, and jolted the Dow Jones Industrials 4% lower towards the 13,000 level, zapping the value of investors’ 401k accounts.
Guy Caruso, the head of the US Energy Information Administration, told reporters on Nov 12th, “We haven’t seen the full pass-through of high oil prices yet. I would say what's in the pipe right now for gasoline is about another 20 cents.”
The stunning rise in the price of crude oil, up 56% this year and up 365% in a decade, to within a whisker of the magical $100 /barrel level, has some traders wondering whether “Peak Oil” is finally here. If correct, is the spectacular bull-run for global stock markets, which is now 4.5-years old, building a major “rounding top” pattern? Until recently, high and rising oil prices didn’t disturb the bullish psychology among global stock market operators. Instead, the spin surrounding rising oil prices described a positive story, an unprecedented boom in the world economy.
But historically, Global “Oil Shocks” have tipped the global economy into recession.
(13 November 2007)
We don't usually link to investment sites, but this in-depth article looked better than most. -BA
A fit of peak
Rob Lyons, Spiked
The doom-laden vision of a post-oil world put forward in a radical new documentary is as crude as the black stuff that gushes from the ground.
With crude oil prices pushing up towards $100 per barrel, it’s a good time to release a documentary that argues we’re in imminent danger from dwindling oil supply. According to A Crude Awakening, demand for oil is accelerating while supply has peaked and will shortly go into rapid decline. The result will be social disruption on a scale unseen since the Great Depression. Sounds scary - but in reality these arguments seem as crude as the black stuff gushing from the ground.
The film, made by Swiss journalist Basil Gelpke and Irish producer Ray McCormack, is a diatribe against the evils of an oil-based economy. Opening with a narration befitting a horror movie, we are told that oil is the ‘devil’s excrement’ and the ‘blood of the earth’. Through interviews with a number of experts, activists and politicians, Gelpke and McCormack argue that developed economies, most notably the USA, are utterly dependent on oil.
(12 November 2007)
Energy Decline and National GDP in 2050: The Growth of Destitution
Paul Chefurka (GliderGuider), The Oil Drum: Canada
In Part 1 I derived a scenario for the changing global energy supply picture between now and 2050. The conclusion in that article was that due to the rapid decline of oil and natural gas supplies, the total energy available to the world would drop by about 30% in that time. That single figure, however, doesn't tell us much. The picture is dramatically complicated by the fact that the world will be forced to transition from an energy economy largely based on fuels (oil and natural gas) to one based primarily on electricity generated from a variety of sources. In addition, most of the world's population growth in that time will occur in the energy-poor and economically-poor developing world.
In order to gain more insight into how changes in energy will affect different parts of the world, this article will examine the impact of energy declines in specific countries. We will disaggregate the global picture presented in the baseline energy article, and apply those changes to the specific energy circumstances of individual nations. Those energy changes will be translated into their effect on national GDP. The national population changes projected by the UN Medium Fertility Case will be used to translate the national GDP changes into average per capita GDP changes for each country.
The examination of changing per capita GDP, driven by changes in the energy supply and national populations, will help us understand the distribution and extent of wealth and poverty over the next half century.
(13 November 2007)
ODAC News - Tues 13 Nov
Douglas Low, Oil Depletion Analysis Center (ODAC)
‘Oil Crisis’ in the US Media
1/ Rising Demand for Oil Provokes New Energy Crisis (NY Times, Fri 09 Nov)
UK Lecture - Richard Heinberg
2/ UK Lecture: What will we eat when the oil runs out?, Richard Heinberg, The Soil Association, London, 22 November 2007
Bolivian Fuel Problems
3/ Fuelling Bolivia's crisis? (BBC News, Thu 08 Nov)
Economy - UK
4a/ House prices continue to fall (The Guardian, Thu 08 Nov)
4b/ UK Trade - Deficit widened to £5.1bn in Sept 2007 (National Statistics [UK govt], Fri 09 Nov)
4c/ The witches' brew of 1987 is back again (The Telegraph, Thu 08 Nov)
4d/ Surveyors see house price falls (BBC News, Tue 13 Nov)
Economy - USA
5a/ Housing meltdown hits US economy (BBC News, Fri 09 Nov)
5b/ Carnage on Wall Street as loans go bad (BBC News, Tue 13 Nov)
Peak Oil / IEA Forecasts in the FT
6a/ Twin threats and a lack of leadership (The Financial Times, Fri 09 Nov)
6b/ Peak oil: How will we cope when the oil has run out? (The Financial Times, Fri 09 Nov)
(13 November 2007)