We have already entered peak oil,’ IEA source reportedly claims

http://rawstory.com/2009/11/we-entered-peak-oil-iea-source-reportedly-claims/
By Stephen C. Webster

Two International Energy Agency whistleblowers have come forward with startling claims about the world's supply of crude oil, according to a report published Tuesday.

"We have [already] entered the 'peak oil' zone," an unnamed former IEA official told British newspaper The Guardian. "I think that the situation is really bad."

A second whistleblower reportedly claimed that the IEA's current figures are inflated due to pressure from the United States and a pervasive fear that the announcement of falling oil output in the future could cause markets to respond with panic.

The claims come on the same day the IEA plans to publish its annual "World Energy Outlook" report for 2009.

"Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further," one of the IEA sources reportedly told the paper. "And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources."

The agency reported in its 2008 World Energy Outlook that a field-by-field analysis of production trends revealed "that decline rates are likely to rise significantly in the long term, from an average of 6.7% today to 8.6% in 2030."

The whistleblowers see things differently.

"The IEA in 2005 was predicting oil supplies could rise as high as 120m barrels a day by 2030 although it was forced to reduce this gradually to 116m and then 105m last year," one of the sources claimed. "The 120m figure always was nonsense but even today's number is much higher than can be justified and the IEA knows this."

In a 2008 interview with Fatih Birol, chief economist at the IEA, Guardian environment writer George Monbiot reported that the IEA had expected peak oil output to be reached in a decade or two.

"In terms of non-Opec [countries outside the big oil producers' cartel]," Birol reportedly said, "we are expecting that in three, four years' time the production of conventional oil will come to a plateau, and start to decline. In terms of the global picture, assuming that Opec will invest in a timely manner, global conventional oil can still continue, but we still expect that it will come around 2020 to a plateau as well, which is, of course, not good news from a global-oil-supply point of view."

The 2008 World Energy Outlook suggested peak oil would be reached in 2030.

The prediction that peak oil production was approaching in 2020 was enough to "scare the pants off" Monbiot, considering the predicted implications of a global energy crunch in just over a decade. However, if the allegations by The Guardian's whistleblowers are indeed true and peak oil has been reached, dark days loom for the global economy.

According to The Wall Street Journal, the agency is not expected to announce the arrival at such a dramatic conclusion. Instead, the 2009 report due out Tuesday will predict slower growth in demand for oil, the Journal reported.

Reuters added: "While the Paris-based IEA has repeatedly warned that a lack of investment could lead to a strain on supply, it maintains that there is enough oil in the ground."

The End Of Fossil Fuel

forbes.com

By Chris Nelder, 07.24.09, 03:00 PM EDT

Prepare for a radically different lifestyle as global crude oil production peaks and begins to decline.

You will never see cheap gasoline again. You will probably never see cheap energy again. Oil, natural gas and coal are set to peak and go into decline within the next decade, and no technology can change that.

Peaking is a simple concept. We generally exploit natural resources in a bell-shaped curve, with the rate of extraction increasing over time until we reach a peak and then gradually slowing down until we stop using them.

Peak oil is not about "running out of oil"; it's about reaching the peak rate of oil production. It's not the size of the tank that matters, but the size of the tap.

Read more about how soaring energy prices will transform our lives in our special report on $20 a Gallon.

The peak is usually reached when resources become too difficult to extract, or too expensive, or they are replaced by something cheaper, better or more plentiful. Unfortunately, we have no substitutes for oil that are cheaper or better.

According to the best available data, we are now at the peak rate of oil production. After over a century of continual growth, global conventional crude oil production topped out in 2005 at just over 74 million barrels per day (mbpd) and has remained at that level ever since.

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The additional "oil" that brings the oft-cited world total to 84 mbpd today (down from 87 mbpd last year; according to U.S. government data) isn't conventional crude, but, rather, unconventional hydrocarbons, including natural gas liquids, "extra heavy" oil, synthetic oil made from Canadian tar sands, refinery gains, liquids produced from the conversion of coal and natural gas, and biofuels.

Oil production is expected to go into terminal decline around 2012. The principal reason is that the largest and most productive fields are becoming depleted while new discoveries have been progressively smaller and of lesser quality. Discovery of new oil peaked over 40 years ago and has been declining ever since despite furious drilling and unprecedentedly high prices.

When it begins to decline, rate of crude production is projected to fall at 5%, or over four mbpd, per year--roughly equivalent to losing the entire production of Latin America or Europe every year. The decline rate will likely accelerate to over 10% per year by 2030.

The Paris-based International Energy Agency estimates that the world would need to add the equivalent of six new Saudi Arabias by 2030 in order to meet declining production and growing demand. Obviously, there aren't another six Saudi Arabias waiting to be discovered, and unconventional liquid fuels simply cannot fill such a yawning gap.

Natural gas is likewise expected to peak some time around 2010-2020, and coal around 2020-2030. Oil, natural gas and coal together provide 86% of the world's primary energy.

By the end of this century, nearly all of the economically recoverable fossil fuels will be gone. From now until then, what remains will be rationed by price. There will be shortages.

Renewable energy--solar, wind, geothermal--currently makes up less than 2% of the world's primary energy supply, and although growing very rapidly, it is not on course to fill the fossil fuel gap, either.

As fossil fuels peak and then decline, the world's economies will be forced for the first time to live within a shrinking, not expanding, energy budget. They will adapt to this new reality by repeating the cycle we saw over the last 18 months: commodity price spikes, leading to economic destruction, leading to supply destruction, leading back to price spikes. Only in recessionary periods, like now, will there be excess supply.

How this will affect the global economy, and our lifestyles, cannot be overstated. Former chief economist for Canadian Imperial Bank of Commerce World Markets, Jeff Rubin, and oil investment banker Matthew Simmons have concluded that it means no less than the end of globalization.

Americans, who constitute 4% of the world population but consume 25% of its energy, will have radically different lifestyles. Production of everything will have to be re-localized. Instead of our food traveling an average 1,500 miles before it reaches us, it will have to come from nearby and use organic methods instead of requiring 10 calories of fossil fuel inputs for every calorie of food we eat.

Rather than shipping ore to China and shipping it back to the U.S. as steel, we'll need to revive our domestic steel industry. "Bedroom communities" will die and ideally be reborn as fully functional independent communities. It means the end of long commutes.

The coming energy shortage is the most serious crisis the world has ever faced, but it could have a very positive outcome. In theory, the Earth's wind, solar, geothermal and marine resources could each provide more than the total energy the world consumes every day, if we had the ability to harvest them.

As fossil fuel prices rise, the price of renewably generated electricity will continue to fall. If we are wise and lucky, we will rapidly improve the efficiency of our built environment, deploy renewable capacity and convert to an all-electric infrastructure that runs on it. Fortunately, political momentum is now leaning strongly in this direction.

If we move fast to re-localize production and proceed with the renewable revolution, we could end the 21st century with a largely carbon-free economy, putting an end to climate change and averting resource wars. We would have healthier food and a safer, more resilient and equitable world.

Chris Nelder is the author of Profit from the Peak--The End of Oil and the Greatest Investment Event of the Century and the coauthor of Investing in Renewable Energy. He blogs on GetRealList.

'$20 Per Gallon' by Christopher Steiner

Los Angeles Times

Christopher Steiner looks ahead and projects, $2 at a time, how rising gasoline prices will transform civilization.

By Matthew DeBord

Amazon.com - $20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better

During the summer of 2008, Americans found out just how much was too much to pay for gas. On July 11, a barrel of oil hit $147.27, which translated into $4.11 for a gallon of regular gas at the pump -- the highest price ever reached in the U.S. And that was just the average. In some places, the price got close to $5 a gallon. It was the Summer of Pain.

Many people who'd never heard of "peak oil," or who'd been trading in one SUV for another, or who'd scoffed at the idea that Americans would ever drive less, suddenly learned that when the price of a finite commodity spikes, even cherished habits change. And it's not just about driving: Our entire American way of life, in fact much of the global economy, has been built over decades on cheap oil: Seafood and plastic toys from China can flow freely around the world. The price of bread and milk stays low. Airlines can engage in price wars.

But when the price of oil rises dramatically, inflation can kick in, scarcity can become the order of the day, freeways empty, General Motors and Chrysler slide into bankruptcy, and the American way of life grinds to a halt. Of course, after the price of oil crested in 2008, it quickly collapsed, leading some observers to speculate that the Summer of Pain was a blip on the radar.

But for the first six months of this year, the price was steadily rising. Though it has stabilized and even fallen in recent weeks, it may begin a slow, undulant march until gas literally costs too much for anyone.

This is the altered state of petroleum consciousness that Christopher Steiner, a trained engineer and writer for Forbes, envisions. And it's happening quickly, he points out. "As the middle class continues to explode in China, India, and scores of other spots circling the earth, hundreds of millions of additional cars will hit the roads," he writes. Many of those cars will be like the $2,200 Tata Nano, a "people's car" created for Indian consumers who've been riding bicycles and motor scooters for generations. "People want what Americans have had for decades: easy cars and an easy life. These people will get what they want, but in the process they will catalyze a global economic reformation on a scale never seen. . . . " Even the tattered remnants of the Detroit Big Three want a piece of this market: As General Motors left bankruptcy at home, it was selling more cars than ever in China.

Steiner has adopted a nicely readable structure for the book. Starting at $4 a gallon, each chapter tracks what will happen when gas hits a particular price, escalating by $2 until he gets to $20. He visits an airplane graveyard in order to explain how $8-a-gallon gas will crush the airline industry. At $14, he checks out an abandoned Wal-Mart "ghost box" and imagines a grim end to the car-dominated exurb. "Stores will return to the downtowns of yore as small towns' populations . . . return to the small-town infrastructures that their grandparents and great-grandparents built."

By $18 a gallon, high-speed railroads serve our travel needs, and by $20 a gallon, we just can't do oil anymore. And like a lot of people who've studied our post-oil energy options, he comes down on the side of nuclear. Eventually, he's replaced transatlantic flights with leisurely ocean passages akin to the grand liners of yesteryear. Except these new Queen Marys will run on nuclear reactors. Personal cars will be a thing of the past. Citizens of the future will wonder why we ever thought we needed them.

By now, you may have noticed a great bifurcation here, typical of newbies to the study of spiking oil prices. We Americans will find our existence irrevocably altered to the point where we are forced to inhabit a downmarket green fantasy, harvesting power from wind and ocean currents, breaking our addiction to automobiles and generally living with less. Meanwhile, the developing world will have become the new first world, with a middle class with disposable income that Americans lack filling China, India and other rapidly growing countries with roads, cars and petroleum products. At least until all the oil runs out and they, too, must convert to lives of noble deprivation.

Some of Steiner's speculations will happen. In particular, rising global energy demand could have a disastrous impact on food cultivation, which at the industrial scale needed to feed a populous planet requires fertilizers synthesized from natural gas. Nuclear power will be an obvious alternative-energy choice when gas settles into double-digit per gallon prices.

Personal mobility could be another story, however, and here Steiner gets into tricky territory when he latches onto start-up electric car companies and gee-whiz mobility providers. In fact, good old internal-combustion engines running on gas may be with us for much longer than he thinks. Even $10 per gallon gas would be acceptable if efficient gas and hybrid engines can achieve significantly higher mileage, which is technologically feasible. Widespread electrification of transportation will come, but we could have to wait until the middle of the century, or even longer. The romance of the personal automobile won't fade so fast in the U.S., especially if it increases its hold elsewhere.

There's also a glaring omission in "$20 Per Gallon" that should be addressed. Much of the ground that Steiner covers, with a certain boyish, gearhead utopianism, was traversed in much more apocalyptic fashion by James Howard Kunstler in his 2005 book, "The Long Emergency." Kunstler's arguments, which are actually more ecological than economic, are well known and widely debated. So it seems remarkable that Steiner, who comes to many of the same conclusions, fails to acknowledge a book that's been around for four years and actually anticipated the 2008 gas mini-crisis. "$20 Per Gallon" also reads at times as if it were hurriedly written. Still, Steiner has served up a terrific speculative primer on a future of much pricier energy and all that it may entail.

DeBord writes the Shifting Gears blog for Slate's the Big Money and has written widely on the automobile industry and the future of mobility.

‘Peak oil’ debate is no longer on hold

BusinessDay

Put a group of oil experts under one roof for a while and their discussion is likely to drift to the subject of peak oil — a point in time when maximum oil production is reached, after which it goes into permanent decline.

The advent of peak oil has long been brushed aside by some because it seems like a far-fetched, if not a ridiculous, idea concocted by alarmists. This is despite deafening cries that it is a real and serious threat.

Even among those who agree that it will happen, views differ sharply on the date . Some, like author David Strahan, say it could be as soon as 2017.

Recent data show that the debate can no longer be dismissed as a figment of the imagination among peak oil “enthusiasts”.

According to the Washington, US-based Worldwatch Institute, oil production is in decline in 33 of the 48 largest oil-producing countries. The research organisation says most of these countries are past their oil production peaks. Iran peaked in 1974, Nigeria in 1979, Venezuela in 1970 and Mexico in 2004.

Saudi Arabia, the world’s largest oil exporter, is expected to reach its peak in 2014, while in Iraq this is estimated in 2018.

Last year’s study by professional services group Ernst & Young showed that in the period between 2003-07, oil production in the US remained flat at about 1,2-million barrels a day.

Oil companies had difficulty in finding investment and production opportunities, say Ernst & Young.

But not everyone is convinced about peak oil. BP chief economist Christof Rühl says the argument for peak oil is baseless. “Peak oil has been predicted for 150 years. It has never happened, and will stay this way,” Rühl has reportedly said. He says oil is about price and not about availability.

Economist Tony Twine of consultants Econometrix echoes the view that price is everything.

“All energy — gas, oil and coal — is exploitable at a given price. If the price falls below a particular price it becomes worthless to produce. That is why I say many of the peak oil arguments are not well based.

“They all assume an oil price at 30, 60 or 200 a barrel,” he says. What is known as “oil availability” differs at different oil prices, Twine says.

“The projections that are being made about peak oil are sensible in particular contexts. But whether they are universally true is another matter,” he says.

Even in 30-50 years’ time, if oil demand is greater than supply, oil prices will rise “and currently unexploitable deposits will become viable to exploit”, Twine says. O il wells now considered marginal will become profitable .

Twine says there is a tendency to look at oil in terms of its energy content. “But there is a range of products that come out of a barrel of oil — from fertiliser to solvents that end up in paints, washing powder and synthetic fibres. Almost anything that you can see and feel has a little bit of oil in it.

“As oil becomes scarce and more expensive, its use as a source of energy will diminish. But its use as a feedstock for the chemicals industry will take longer to disappear,” Twine says.

Richard Worthington, climate change programme manager for the World Wildlife Fund in SA, says the advent of peak oil should influence how hydrocarbons are used. “It highlights the need for greater efficiency,” he says. C limate change considerations have supers eded peak oil discussions.

Worthington says fears of peak oil should not be the main driver of the move away from fossil- based energy sources. At some stage fossils will be depleted, he says. “Now there is talk of peak oil, then it will be peak energy and then peak coal,” he says.

Indeed, depletion of gas and coal reserves is a double whammy. National oil and gas company PetroSA’s Mossel Bay gas-to- liquids refinery is set to run out of natural gas by 2011.

The offshore fields south of Mossel Bay will not be able to keep up the supply of 36000 barrels a day the refinery needs.

The dwindling gas reserves are to be expected, says Twine.

“Gas and oil fields in SA and Mozambique have always been known to be constrained in terms of reserves. They have always been marginal in terms of big investment spending,” Twine says.

H owever, he believes that the Mozambique gas fields will have a longer life span and are likely to fuel petrochemicals group Sasol for a longer time. Sasol’s synfuels plant in Secunda gets natural gas from Mozambique through an 865km-long pipeline.

njobenis@bdfm.co.za

Could $20-Per-Gallon Gasoline Make Us Happier?

NPR

Listen – mp3

When it's time to fill up the gas tank, many fear the price of gas will return to the $4-a-gallon days of last summer. But according to author Chris Steiner, our lives would be a lot happier and healthier if gas prices rose into the double digits. Steiner explains himself, and the title of his book: $20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better.

Amazon.com Review
Imagine an everyday world in which the price of gasoline (and oil) continues to go up, and up, and up. Think about the immediate impact that would have on our lives. Of course, everybody already knows how about gasoline has affected our driving habits. People can't wait to junk their gas-guzzling SUVs for a new Prius. But there are more, not-so-obvious changes on the horizon that Chris Steiner tracks brilliantly in this provocative work. Consider the following societal changes: people who own homes in far-off suburbs will soon realize that there's no longer any market for their houses (reason: nobody wants to live too far away because it's too expensive to commute to work). Telecommuting will begin to expand rapidly. Trains will become the mode of national transportation (as it used to be) as the price of flying becomes prohibitive. Families will begin to migrate southward as the price of heating northern homes in the winter is too pricey. Cheap everyday items that are comprised of plastic will go away because of the rising price to produce them (plastic is derived from oil). And this is just the beginning of a huge and overwhelming domino effect that our way of life will undergo in the years to come. Steiner, an engineer by training before turning to journalism, sees how this simple but constant rise in oil and gas prices will totally re-structure our lifestyle. But what may be surprising to readers is that all of these changes may not be negative--but actually will usher in some new and very promising aspects of our society. Steiner will probe how the liberation of technology and innovation, triggered by climbing gas prices, will change our lives. The book may start as an alarmist's exercise.... but don't be misled. The future will be exhilarating.

Amazon.com Review
Q&A with Christoper Steiner, the author of $20 per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better

Steiner, an engineer-turn-journalist, explains how the simple but constant rise in oil and gas prices will change our lifestyle, but not necessarily for the worse. Read this Q&A to find out more about this revolutionary theory.

Gas prices are going up again this summer, but are you really suggesting prices might rise to $20 a gallon?

That figure lies far ahead in the future; it's hardly an imminent thing. But most people don't require much convincing to know that $2 gas isn't sustainable for the long term. Oil is a finite resource that the whole world demands--a world that grows more gasoline consumers every day. It's important to understand that this book isn't about oil statistics, it's about our lives and the ways in which we live will change.

What do you hope readers will gain from reading your book?

Readers should gain an appreciation for the kind of change that lies behind the growing price of gas. Weaning ourselves from gasoline isn't a scary thing, it's an exciting thing. We're talking about cleaner environments, more walkable lives, better public transportation and more vibrant cities.

What are some of the surprising ways you think rising gas prices will change our everyday lives?

I don't think people realize how close our airline industry is to an all-out collapse. The book details a massive airline extinction at $8 per gallon, and in fact, serious change could take place even before then. It's certainly not something that should be celebrated, but the collapse of that industry will open the door to new ones, such as widespread high-speed trains in America, a phenomenon that won't take serious root until plane tickets become luxuries rather than conveniences. Beyond the airlines, I think people might be surprised to think that their future may not include Wal-Mart, and that their food world may condense, ruling out things such as sushi, but introducing things such as local organic fruit, vegetables and meat.

Is this pure speculation and fantasy or what kind of research did you do?

I consulted experts in a bevy of industries throughout the whole book, so this is not a random exercise, far from it. That said, it can be hard to forecast exactly at what gas price each change will happen. There are many unforeseen factors that can accelerate or forestall a certain change, such as government involvement in building high-speed train networks. If the government funds trains aggressively, change will be effected quicker, obviously. But I do feel that all of the changes represented in the book will happen eventually, whether they take place at gas prices of $10 per gallon or $12 per gallon.

So how scared should we be of the changes to come?

There is little to be scared of. The rising price of gas will unlock countless doors to innovation, opportunity and change.

Why does your book's subtitle say rising gas prices will change our lives "for the better"? How so?

We've grown used to engorging ourselves on the back of cheap oil and it has lead to all manners of problems. As the price of gas goes up, we'll live closer to work, school, eat healthier foods and even be skinnier and safer. The book profiles research that connects cheap oil to America's obesity rate and to the daunting numbers of people that die on our roadways. As the price of gas goes up to, say, $6, we'll save more than $30 billion on obesity-related diseases, 10,000 fewer people will die in car crashes and thousands of people will be spared heart attack deaths related to air pollution. Those kinds of effects will only be magnified as the price of gas rises further. And that's just a sampling of the benefits.

In what ways will rising gas prices improve our economy and job market?

America has lost much of its manufacturing mojo during the last 20 years. A green revolution, fueled by a search for alternative energies and technologies, could change that. Not only will there be need to produce things such as solar panels, electric cars, and new city infrastructure, but the power of globalization will be blunted by higher gasoline prices. The advantages of, say, making a computer in China decrease as the cost of fuel increases and the cost of transporting things all over the earth rises-that will lead to manufacturing jobs returning here, to home soil.

In what ways will the rising cost of gasoline boost innovation?

The innovation game is one that many people anticipate as oil's grip on the world ebbs. New technologies will be needed in all arenas that oil touches, including cars, trains, our homes, the plastic we use and the roads we drive on-and those are just a few examples. The opportunities for inventors in a world with less oil will be prolific.

What kind of places did you visit for your research and why was it necessary to visit them?

Good books need good stories, and it's hard to tell a good story from just talking to people over the phone, so I got out there and did things. I worked on an electric UPS truck in Manhattan for a day; I spent some time on a fishing boat hauling in Asian carp; I descended into one of New York's new train tunnels currently under construction; I rode our nation's fastest train to meet the Amtrak CEO in Washington. I'm not anointing my book or my stories as good--that's up to the reader--but creating an enriching storyline within a nonfiction book was my goal, so I'm hopeful I did that.

So now that we know this, what should we do in the here and now?

Preparing for the future isn't about buying the latest gadgets or the car with the best mileage. Those things help, of course, but they're mere pings in a coming cacophony. People who will do the least amount of adjusting in the future are those who already live more sustainable lives. Where you live largely determines how you live. Buying solar panels for a house at the far edge of the suburbs, for instance, won't alter how the future affects you. Moving to a walkable neighborhood where groceries, your kids' schools, your office or a train are all within several blocks-that's a change you'll profit from and a place where the future will be kinder.

Peak Oil Day

Richard Heinberg's Museletter

By Richard Heinberg

On July 11, 2008, the price of a barrel of oil hit a record $147.27 in daily trading. That same month, world crude oil production achieved a record 74.8 million barrels per day.

For years prior to this, a growing legion of analysts had been arguing that world oil production would max out around the year 2010 and begin to decline for reasons having to do with geology (we have found and picked the world’s “low-hanging fruit” in terms of giant oilfields), as well as lack of drilling rigs and trained exploration geologists and engineers. “Peak Oil,” they insisted, would mark the end of the growth phase of industrial civilization, because economic expansion requires increasing amounts of high-quality energy.

During the period from 2005 to 2008, as oil’s price steadily rose, production remained stagnant. Though new sources of oil were coming on line, they barely made up for production declines in existing fields due to depletion. By mid-2008, as oil prices wafted to the stratosphere, every petroleum producer responded to the obvious incentive to pump every possible barrel. Production rates nudged upward for a couple of months, but then both prices and production fell as demand for oil collapsed.

Since then, with oil prices much lower, and with credit tight to unavailable, up to $150 billion of investments in the development of future petroleum production capacity have evaporated. This means that if a new record production level is to be achieved, further declines in production from existing fields have to be overcome, meaning that all of those canceled production projects, and many more in addition, will have to be quickly brought on-stream. It may not be physically possible to turn the tide at this point, given the fact that the new “plays” are technically demanding and therefore expensive to develop, and have limited productive potential.

On May 4 of this year, Raymond James Associates, a prominent brokerage specializing in energy investments, issued a report stating, “With OPEC oil production apparently having peaked in 1Q08, and non-OPEC even earlier in 2007, peak oil on a worldwide basis seems to have taken place in early 2008.” This conclusion is being echoed by a cadre of other analysts.

Maybe it’s a stretch to say that the production peak occurred at one identifiable moment, but attributing it to the day oil prices reached their high-water mark may be a useful way of fixing the event in our minds. So I suggest that we remember July 11, 2008 as Peak Oil Day.

We are now approaching the first-year anniversary of Peak Oil Day. Where are we now? The global economy is in tatters, yet oil prices have recovered somewhat (they’re now about half what they were in July 2008). World energy consumption is down, world trade is down, the airline industry is shrinking, and most of the world’s automakers are on life support.

It is too late to prepare for Peak Oil–a year too late, in fact. Now the name of the game is adaptation. We are in an entirely new economic environment, in which old assumptions about the inevitability of perpetual growth, and the usefulness of leveraging investments based on expectations of future growth, are crashing in flames. Even if economic activity picks up somewhat, this will occur in the context of an economy significantly smaller than the one that existed in July 2008, and energy scarcity will quickly cause most green shoots to wither.

It is impossible to say what will happen in the future with regard to oil prices. Clearly, very high prices kill demand by undercutting economic activity. Thus it is possible that the barrel price of petroleum may never break last year’s record. On the other hand, if the value of the dollar were to collapse, then the sky’s the limit for prices in dollars per barrel.

It is easier to forecast the oil supply trend: though we’ll see level-to-rising production temporarily from time to time, in general it’s down, down, downhill from now on.

Even though Peak Oil is now in the past, its annual commemoration on Peak Oil Day may serve an important purpose by reminding us why our economy is shrinking, and by focusing our thoughts on ways to facilitate the transition to a post-petroleum world.

What are some appropriate ways to commemorate
Mark your calendar. What will you be doing on July 11?

Help us “celebrate” Peak Oil Day by signing our petition.

Spectre of peak oil prices loom

canada.com

By Barbara Yaffe

Oil at $200 a barrel is not far off and with it a new world order that will see the demise of globalization.

That prediction is put forward in a new book by well-known Canadian economist Jeff Rubin: Why Your World Is About To Get A Whole Lot Smaller.

Money, of course, makes the world go round and when transportation costs become punishing people start looking to buy local.

The author reasons that the price advantage currently held by low-wage countries will simply disappear.

And Rubin cites a second factor that substantiates his theory -- the introduction of carbon pricing.

The U.S. -- and Canada and presumably other developed countries -- soon will mandate a cap-and-trade scheme that would impose tariffs on goods deriving from nations that don't similarly restrict carbon emissions.

What this would mean is extra duties, or a pollution tax, on imports coming from places like China. Such tariffs again would negate the cost advantage of imports from low-wage countries.

All of which explains why North American labour unions are starting to find common cause with environmentalists, one example being the Blue Green Alliance, bringing together the Sierra Club and the United Steelworkers of America.

Here's the sort of calculation that's not lost on the three-year-old alliance: Higher transport costs flowing from $200-a-barrel oil would impose the equivalent of a 25 per cent tariff on Chinese imports, while a carbon tariff would be about 17 per cent. Presto -- a 42 per cent duty on Chinese goods.

The result? The potential revitalization of industrial sectors in Western countries that in recent years have bled jobs to foreign lands. Don't write off the American Rust Belt quite yet.

"At the same time as North American and European markets return to local sourcing," writes Rubin, "they will sever their trade links with the developing world and force that world to find another way to grow.

"As our world becomes smaller, their world becomes poorer."

This will cause economic havoc in the developing world, a situation that, predicts Rubin, will be further aggravated by the shutting off of a critical safety valve, migration.

Higher oil prices, after all, will mean more unemployment and fewer job openings in the developed world.

These predictions may seem a bit fanciful with oil at $60 a barrel, as it is now.

But Rubin, and most others, believe recent low oil prices are directly related to the ongoing recession and will surge again once economies start bouncing back.

The book, besides predicting a return of robust manufacturing and agricultural sectors in the developed world, is not a bearer of much good news.

The economist believes we are in for an era of repeated recessions, caused by ballooning oil prices that are inevitable given that oil reserves are in decline.

The only way to avoid such a fate is to wean ourselves off our debilitating addiction to petroleum.

Rubin's is one of a raft of books published in recent years warning of crisis and devastation if we fail to adapt to the fact that the aggressive burning of fossil fuels no longer is viable.

In view of all these dire warnings, citizens would be correct to wonder what exactly is on the reading lists of their politicians, who in their legislative priorities seem all but oblivious to the pending doom.

byaffe@vancouversun.com

Spectre of peak oil prices loom

canada.com

By Barbara Yaffe

Oil at $200 a barrel is not far off and with it a new world order that will see the demise of globalization.

That prediction is put forward in a new book by well-known Canadian economist Jeff Rubin: Why Your World Is About To Get A Whole Lot Smaller.

Money, of course, makes the world go round and when transportation costs become punishing people start looking to buy local.

The author reasons that the price advantage currently held by low-wage countries will simply disappear.

And Rubin cites a second factor that substantiates his theory -- the introduction of carbon pricing.

The U.S. -- and Canada and presumably other developed countries -- soon will mandate a cap-and-trade scheme that would impose tariffs on goods deriving from nations that don't similarly restrict carbon emissions.

What this would mean is extra duties, or a pollution tax, on imports coming from places like China. Such tariffs again would negate the cost advantage of imports from low-wage countries.

All of which explains why North American labour unions are starting to find common cause with environmentalists, one example being the Blue Green Alliance, bringing together the Sierra Club and the United Steelworkers of America.

Here's the sort of calculation that's not lost on the three-year-old alliance: Higher transport costs flowing from $200-a-barrel oil would impose the equivalent of a 25 per cent tariff on Chinese imports, while a carbon tariff would be about 17 per cent. Presto -- a 42 per cent duty on Chinese goods.

The result? The potential revitalization of industrial sectors in Western countries that in recent years have bled jobs to foreign lands. Don't write off the American Rust Belt quite yet.

"At the same time as North American and European markets return to local sourcing," writes Rubin, "they will sever their trade links with the developing world and force that world to find another way to grow.

"As our world becomes smaller, their world becomes poorer."

This will cause economic havoc in the developing world, a situation that, predicts Rubin, will be further aggravated by the shutting off of a critical safety valve, migration.

Higher oil prices, after all, will mean more unemployment and fewer job openings in the developed world.

These predictions may seem a bit fanciful with oil at $60 a barrel, as it is now.

But Rubin, and most others, believe recent low oil prices are directly related to the ongoing recession and will surge again once economies start bouncing back.

The book, besides predicting a return of robust manufacturing and agricultural sectors in the developed world, is not a bearer of much good news.

The economist believes we are in for an era of repeated recessions, caused by ballooning oil prices that are inevitable given that oil reserves are in decline.

The only way to avoid such a fate is to wean ourselves off our debilitating addiction to petroleum.

Rubin's is one of a raft of books published in recent years warning of crisis and devastation if we fail to adapt to the fact that the aggressive burning of fossil fuels no longer is viable.

In view of all these dire warnings, citizens would be correct to wonder what exactly is on the reading lists of their politicians, who in their legislative priorities seem all but oblivious to the pending doom.

byaffe@vancouversun.com

Book Review: Blackout

Domestic Fuel

By Joanna Schroeder

Under the surface we seem to have a lot of it. It’s fairly inexpensive but this is changing as demand rises to meet increased energy needs especially in countries like China. So we have a lot, its cheap, let’s use it, what’s the problem? Right? Wrong!

Author Richard Heinberg writes in Blackout: Coal, Climate and the Last Energy Crisis, “In short: two of the defining trends of the emerging century–the development of the Asian economies and climate change–both center on coal. But coal is finite non-renewable resource. Thus, a discussion of the future of coal must also intersect with a third great trend of the new century: resource depletion.”

In the first part of the book, Heinberg takes the reader through a deep analysis of just how much coal is available throughout the world. Keep in mind, forecasts assume that current energy use stays the same, but it is increasing each year, making coal available for a shorter amount of time. Best estimates are that the world will see Peak Coal by 2025 and many believe that the world has already witnessed Peak Oil.

Now, you’re just waiting for me to say there is no such thing as clean coal. So there, it’s out in the open. In the second section of the book, Heinberg talks about the link between coal and greenhouse gas emissions and discusses the technologies to create “clean coal”. They are all challenged to say the least.

At the end of Blackout, Heinberg details three scenarios that involve coal, climate and energy. They are all very disturbing, but Heinberg has a way of tackling issues head on.

“For strategic purposes, it is important to understand our human tendency to discount future problems. We must assess which threats will come soonest, and make sure that out sometimes frantic efforts to respond to these immediate necessities do not exacerbate problems that will show up later. Peak Oil is clearly the most immediate energy and resource supply threat the policy makers must deal with….”

He continues, “If energy scarcity forces policy changes before climate fears can do so, then perhaps world leaders will find that it makes more sense to ration fuel themselves, rather than the emissions they produce.”

rhshovelHeinberg continues by warning if we don’t get a grip on the real amount of fossil fuels supplies we have left as well as a deeper understanding of the environmental and economic consequences of burning fossil fuels..hello Blackout.

Wow, conservation…what a novel concept…good thing the fuel economy standards (aka CAFE standards) were finally improved.

“…Otherwise, the policies pursued are likely to be ineffective, counterproductive, and inconsistent.” Can you say proposed Climate Bill?

I’m a huge fan of Heinberg and he doesn’t disappoint with Blackout. You can buy this book or any book I review by clicking here.

BTW - Richard Heinberg is going to be a guest on the premier of national radio program Pure Energy, hosted by Sean O’Hanlon. The show debuts on July 13, 2009 at 6:00 p.m. EST on 880 The Biz and can also be heard live on www.PureEnergyShow.com.

Peak Oil Blues

Peak Oil Blues

Are you 'coping' or 'freaking out' about Peak Oil?

What's a 'normal' reaction to learning about a post-oil world?

Fear? Anxiety? Shock? Depression?

No one really knows.

Many people say preparation is "90% mental," but how do you separate out what's "mental preparation" from what's just "acting mental?"

Here we explore what we've learned about various emotional reactions.

Our goal is to help you build the kind of world you want to live in. Sanely.