by frog
It’s lucky I don’t buy it by the barrel. Yesterday’s US$11 rise was the largest single day price rise ever for the price of oil. Americans are now picking that come Independence Day (July 4) they will be shown just how much they are not independent from the world, with oil predicted to hit US$150 a barrel.
Oil exploration company Cairn Energy is calling peak oil, and Kim Hill has just finished interviewing another oilman, Alan Hart from US exploratory company, Sentry Petroleum, on peak oil. The Huffington Post has a quick analysis of the ‘Whose to blame: Peak Oil vs Speculators‘ debate.
Here in New Zealand we have National and Labour who still don’t seem we need to prepare for reducing our oil dependency.
Published in Environment & Resource Management by frog on Sat, June 7th, 2008
Tags: , Frog, frogblog, green party, greens, new zealand, oil, peak oil
on the trolls and those who are unable to keep on topic
One of the benefits of a rise in fuel prices is that the size of the whole country increases. Another is that people will (hopefully) place a higher value on where they live.
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I wonder if sail will come back in vogue.
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Can we ramp up the electricity generation projects?
We’re going to need a LOT more ‘tricity….
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I didn’t know 4-pots used more electricity than sixes. If Autotrader is a reliable source of information on used car market realities then I don’t see any evidence of an upsurge in sales of used electric cars.
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Power Line reports that the US has deliberately avoiding seeking out new oil – see below. Also I read that the big US oil companies control only about 10% of world oil production – most of it is controlled by dodgy non-democratic governments, and we know how hard they are to deal with. Perhaps that is the real problem with oil supply.
So do we want higher oil prices or not? Would like to get a ‘yes’ or ‘no’ from the environmentalists.
ANWR Exploration House Republicans: 91% Supported House Democrats: 86% Opposed
Coal-to-Liquid
House Republicans: 97% Supported
House Democrats: 78% Opposed
Oil Shale Exploration
House Republicans: 90% Supported
House Democrats: 86% Opposed
Outer Continental Shelf (OCS) Exploration
House Republicans: 81% Supported
House Democrats: 83% Opposed
Refinery Increased Capacity
House Republicans: 97% Supported
House Democrats: 96% Opposed
SUMMARY
91% of House Republicans have historically voted to increase the production of American-made oil and gas.
86% of House Democrats have historically voted against increasing the production of American-made oil and gas.
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‘powerline’..(heh..!..)
rightwing rag..!
phil(whoar.co.nz)
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Optimist:
OPEC controls only 40% of production, but 60% of the reserves. The private oil companies control 60% of production and 40% of reserves.
ANWAR would mean an approximate 0.5% increase in global oil production for some 10 years. It’s negligible.
Oil shale is a non-starter because the production process is so energy and Co2 – intensive. It would mean a massive boost in C02 emissions at time when we’re trying to cut back.
http://en.wikipedia.org/wiki/Oil_shale_economics
Coal to Liquids fails for similar reasons, though there’s some hope of sequestration technology maturing to the level where it may be useful.
Overall, US production has been steadily declining since 1971, because the several giant oil-fields (where 60% of reserves are held) in Texas went into decline. In the non-OPEC countries many of the giant oil fields are now in decline, and as a result production is stagnating and will soon go into decline. I say this because there is a general rule with oil reserves, where the largest 1% of oil fields will hold about 65% of the reserves – so they therefore tend to dictate production levels.
You can download the PHD at the following URL:
http://publications.uu.se/theses/abstract.xsql?dbid=7625
So now we look to the OPEC dictators for production increases. Don’t hold your breath.
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Looks like peak oil could be here.
We should start preparing ourselves to live in a world with very expensive oil.
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A very Green statement peter paranoid. We’ve been saying that for years. Time’s up!
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Has peak oil arrived … I don’t know; I’m not an expert. Everyone (oil companies, nations etc) lie about reserves and production capacity for various reasons, so I’m not sure if the “experts” know either.
A question I find interesting is: as an individual, are you going to do anything to plan for you and your family’s future in a world with less and more expensive oil? Perhaps all the ideas, no matter how strange, would be helpful to some of us who are worried about what is happening, but don’t know what to do.
Here is my list of things I am going to (try and) do:
1) Use the car less (I can’t afford to upgrade to a more fuel efficient model).
2) Grow as many veges as I can in my rental property’s garden.
3) Reduce electricity and gas consumption in the house as much as possible (I’m not sure I can do much more than I already do, but I’ll try)
4) Eat as cheaply and healthily as possible using as many locally grown foods as I can.
5) Reduce meat and dairy consumption as much as possible (I can easily eat no meat; I’m not sure about the rest of my family).
I’m not sure how much the above items will help prepare my family for a future with less oil, but its all I can think of right now. Other ideas are welcome.
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“Everyone (oil companies, nations etc) lie about reserves and production capacity ”
The oil companies are independently audited in the US, and if they’re caught “cooking the books” it’s usually been a case of them over-stating their reserves in order to increase their share price (reserves count as equity).
Most of the non-OPEC countries are now in decline. The International Energy Agency (a very conservative and reputable body) sees production in the non-OPEC block reaching a peak in about 2010. If we aren’t technically at peak oil at that time we will have likely reached an effective peak, because the dictators will want to keep the price of oil as high as possible. So the outlook in the medium term (5-20 years) is very expensive ($150 per barrel) oil in the medium term (OPEC decides to moderately up production) to extremely expensive oil ($200+) (OPEC decides to keep production levels flat).
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The only fly in the ointment is the distinct possibility of a global recession-depression, which causes enough economic destruction that the demand is cut out from under the peak. It really doesn’t take much…. unemployment a bit high in the US, people losing their jobs, houses getting foreclosed, AMBAC and MBIA losing their AAA ratings, the stock market tanking and …
What’s that you say? Oh, all those things have already happened?!
What else could go wrong? Another war in the Middle-East?
What’s that you say? …
respectfully
BJ
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bj:
I agree, although it’s because PO will cause economic hardship that we’re worried about it. So, if economic hardship stalls peak, then it’s neither here nor there in the end.
Also, I don’t see the sub-prime crisis causing an extended global recession, but rather a temporary slowing of global economic growth from about 5% per annum to say 1-2% per annum.
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BJ, An indication of the magnitude of the impact a depression will have on oil demand can be gained from the actual impact the last depression had on benzine sales in New Zealand.
In millions of gallons:
1924 = 29, 1930 = 67, 1934 = 52, 1937 = 84
Extrapolating the 1924-30 trend to see what might have happened without a depression gives (approx.) 1934 = 100 , 1937 = 140.
If my thinking is correct then it’s the reduction relative to the trend that is most relevant to what might happen to the current oil extraction plateau during a depression.
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I’m actually expecting a repeat of the aftermath of the Oil Crisis of the 1970s.
International banks trying to offload the massive capital flows arising from the historically high fuel prices, demand destruction occurs in the most fragile and vulnerable oil importing countries, and Saudi Arabia want to keep its market share will massively step up their production, which will mean that the economies of the oil producing countries who have overextended themselves with regards to ‘investments” (Venezuela, Dubai) will face collapse, although perhaps that may not happen this time.
“Saudi Arabia’s Shura council (parliament) will hold a series of meetings over the next two weeks to discuss a controversial proposal by a key member to curb oil production to save reserves for better prices, Saudi media reported.”
http://tinyurl.com/4hng9v
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Just remember two things when you’re calculating something like the global GDP.
1. The US lies about its actual performance. See this:
http://www.shadowstats.com/alternate_data
Not only is the unemployment about 10%, the GDP is -2 and the M3 creation of money is no longer reported. Comparisons with Weimar Germany and Zimbabwe are being bandied about (but it hasn’t gotten that bad… yet).
2. The GDP is a sucky way to measure actual economic progress…
http://www.rprogress.org/sustainability_indicators/genuine_progress_in dicator.htm
So what’s happening in the USA is really pushing hard to get us all over the edge of that cliff. It MAY not push the whole planet into recession, but I’d be playing a real defensive strategy these days.
respectfully
BJ
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where has my comment gone..?
phil(whoar,co.nz)
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“..Also, I don’t see the sub-prime crisis causing an extended global recession..”
gee rodg..!
just a temporary ‘blip’..eh..?..
i didn’t realise you’d joined the ‘happy-clappys’/denialists….
w e are all in very deep doo-doo..
and from here on in..things will just get worse..
the ‘false war’/crisis is over..
to pretend otherwise is to fantasise..
phil(whoar.co.nz)
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I just wish that nice gentleman who does the business summary on the One Breakfast program (is it Corin?) would stop using the word “spike” in relation to oil prices…
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dbuckley,
To be fair, it is a spike. As well as a long-term increase in price.
Oil prices are increasing now as part of a long-term trend which will continue. But the large jump we’ve seen over the last 3 years isn’t justifiable by changes in long-term fundamentals of oil economics. We’re seeing short-term fluctuations – up and down – around a long-term increase in price.
The price of oil will come back down. And then lots of posters and bloggers and columnists will swear that peak oil is a stupid idea. But the price won’t come down to as low as it was before, and then they’ll go up again to even higher highs (and then go down and up and down and up and… trending higher as they go).
And if I could predict any more details than that, I’d be rich.
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“But the large jump we’ve seen over the last 3 years isn’t justifiable by changes in long-term fundamentals of oil economics.”
Thats a very popular view.
The NYMEX chief on TV in the USA in the course of an interview on Friday reportedly stated to the interviewer “Why can’t you see that it is the fundamentals causing this?”
So not a universal view.
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Do the fundamentals include China and India each spending more than $US20bn subsidising energy consumption and regulating petrol price increases to just 10% in the last 12 months?
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