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A rock and a hot place

Written By: - Date published: 6:30 am, July 5th, 2012 - 49 comments
Categories: climate change, Environment, peak oil - Tags:

Yesterday National pollster David Farrar excitedly quoted from a George Monbiot article saying peak oil isn’t happening. Two problems: 1) Farrar omitted to quote the bits of the article, including the title, saying that the flipside of no peak oil would be runaway climate change. 2) the report Monbiot’s article is based on is a load of shit that basically predicts Iraq will stumble on endless cheap oil and we’ll all live happily ever after.

Monbiot’s article is based on the observation that, as a species, we have proven quite incapable of facing up to the fact of climate change, which is already upon us, and have failed to take measures to adequately reduce our carbon emissions. Indeed, 40 years after people started talking about climate change caused by human-caused greenhouse gas emissions and 20 years after we signed a treaty to get them under control, they’re still increasing!

The only, slim hope (if you can call it that) is that resource depletion will lead to rising prices so that the remaining hydrocarbons become too expensive to burn and research into clean fuels is spurred, eventually becoming the more economic choice. Either we ruin our climate, environment, and economy through climate change, or we run out of the cheap oil that drives our economy. Not exactly appealing alternatives but we’ve squandered our opportunity to choose differently.

Monbiot says that ‘hope’ that peak oil will ‘save’ us has been dashed by a report from an oil executive that says production will increase by 17 million barrels a day to 110 mbd in 2020 (the executive uses a wide definition of oil including stuff with low net energy density to say we’re currently producing 93mbd, when most sources, including the authoritative BP statistical review of world energy say 83mbd, really narrow definitions say 73mbd). This Monbiot, concludes, means that runaway climate change is inevitable because peak oil won’t ‘save’ us.

But wait one minute, who was the author of that report again? An oil executive? In fact, Leonardo Maugeri is a senior manager at Italian oil giant, ENI. Might he have a conflict of interest? Might it be exactly what you would expect to hear from an oil executive: ‘don’t worry, there’s plenty of oil! No need to go researching alternatives!’

Indeed, when you dig into Maugeri’s report, it’s a load of shit. The primary conclusion is that, despite world oil production having been flat for 6 years, barely budging in response to the biggest price signals for increased demand in history with oil price spikes every two years since 2008 (and one in 2005), we’re going to see a 20% increase in the next 8 years.

Now, the funny thing about oil production is it takes a long time to come on-stream. You have to find the stuff, starting with seismic and geological surveys, then exploratory wells. You have to get your production wells set up. You have to create some way of getting your product from the well to a refinery and then to market – pipelines, harbours, refineries. All this means that the oil explored for today won’t be coming into the market for 5-10 years.

So, we should have a good idea already of where all the oil is that is going to make up this massive ramping up in production over the coming 8 years. And it is a massive ramping up. 17mbd is more extra production than was added between 1988 and 2006 … and this is supposed to happen in 8 years … after output has flatlined for half a decade.

The biggest source of the increase is supposed to be Iraq, which is meant to triple output. OK, Iraq has, after 9 years, regained pre-war production levels, but to think that it could triple output in 8 years is just stupid. The amount of capital investment in such a short time that would be needed is off the charts. Even if the country remains stable-ish. And where are they going to get the skilled labour?

The other big increase is supposed to by 4mbd more from the US. This is based on the shale oil in the midwest (shale oil, also called tight oil, is  little drops of oil solid in rock, shale, that can’t move unless the rock is fractured – hence fracking) . Yes, production from this source has increased sharply from virtually nothing to 500,000bd in recent years – but that’s not going to grow to 4.5mbd. There’s lots of oil in the shale but it won’t move easily and the fracking they use is only so effective. They get an average of 130 barrels a day per well. And the output from wells declines rapidly as the oil in the immediate vicinity is pulled out, meaning you have to dig lots and lots of wells ust to replace the exhuasted ones. It’s already soaking up all the US’s rigs and oil workers and clogging the pipelines that weren’t built with production in the midwest in mind. To increase production ten-fold in 8 years is just dreaming.

And isn’t it a sign of how hard oil is getting to come by that the one new source of oil to really open up in the last few years of record price spikes is this expensive, low-flow shale oil.

Both the Iraq and US shale oil examples point to a central realisation of the peak oil problem. It’s not that the oil doesn’t exist, it’s that it is too expensive (ie uses too much energy) to extract and the capital – including human capital – required to get evermore oil out of ever smaller and harder to access places just isn’t there.

So, the report is nonsense from a man with a conflict of interest. But the issue Monbiot raises is valid. There is still enough cheap hydrocarbon in the form of coal and gas that we can afford to fry ourselves before it becomes more economic in the capitalist model to switch to clean alternatives.

That’s why we need government leadership on emissions reduction. And why it’s a crime that our government, instead, is supporting Solid Energy’s plans to increase our emissions by 50% by burning dirty coal.

Finally, going back to Farrar. I just want to point out two logical disconnects.

First, Farrar says that “As the price of oil and petrol rises, it will both lead to investment in alternative technologies and lead to greater drilling in previously unprofitable areas.” – he says this after just quoting at length an article supposedly saying that peak oil, the cause of rising oil prices, isn’t happening (btw, saying peak oil isn’t happening is like saying you’re not going to die – it’s an inevitable fact of the system, only the timing is in question).

Second, if investment in alternative technologies is desirable it’s to mitigate climate change and Farrar claims to accept climate science (he just doesn’t think we should do anything about it because it will cost the rich money in the short-run). If you accept climate change and that, therefore, we’ve got to stop using hydrocarbons, how can you then turn around and enthusiastically endorse the Government’s pro-drilling policies?

I guess it requires not thinking about it too hard.


History

49 comments on “A rock and a hot place”

  1. Kotahi Tane Huna 1

    Why waste time and bandwidth on David Farrar? Seriously.

  2. If you accept climate change and that, therefore, we’ve got to stop using hydrocarbons, how can you then turn around and enthusiastically endorse the Government’s pro-drilling policies?

    We can’t just stop using hydrocarbons (without severe adverse effects).

    At the current dependence levels on hydrocarbons and at the current rate of moving to alternative energy sources phasing hydrocarbons out is going to take quite a while. So in the meantime we either have to buy hydrocarbons that are drilled elsewhere, or drill our own.

    Have any realistic projections been done on phasing out hydrocarbons? How long will it take even with a concerted effort to move to alternative energies?

    • This issue of resource depletion has been talked about for decades.  For instance in 1972 the Club of Rome commissioned various reports and even then was talking about the limits to growth.

      Essentially Petey the human race should have been taking steps from then and acted with commitment and determination.

      Unfortunately the debate has been continuously sidelined by those who have a financial interest in consumption or those who for whatever reason have refused to accept the science or who don’t understand. 

    • Jenny 2.2

      Have any realistic projections been done on phasing out hydrocarbons? How long will it take even with a concerted effort to move to alternative energies?

      Pete George

      Good question Pete. And the answer is, Yes they have. Here is one of the many that I could have provided. It is taken from Scientific American a respectable journal, generally considered conservative, (ie. not left). Scientific American specialises in hard science articles, generally accepting only scientifically rigorous and peer reviewed contributions.

      A Plan to Power 100 Percent of the Planet with Renewables

      Wind, water and solar technologies can provide 100 percent of the world’s energy, eliminating all fossil fuels. Here’s how

      Scientific American October 26, 2009

      http://www.scientificamerican.com/article.cfm?id=a-path-to-sustainable-energy-by-2030&page=2

    • Shane Gallagher 2.3

      This also misses what I believe is the main point of peak oil thesis as described by Hubbert in that we have to move to 100% renewable energy supply whilst oil is still abundant and cheap ie. at the actual peak of production. That way we can maximise our future production of energy into the future by building the infrastructure when we have the abundant energy resources to do so.

      So any student of capitalism will understand that by the time the “price indicators” kick in it will be too late to make the transition in time and we go into slow energy decline because the return on energy invested is so low in general for renewables.

  3. Jenny 3

    The theory of Peak Oil has been used by the knowing apologists for climate change as an excuse to do nothing.

    In this country using the excuse of Peak Oil there are plans to pollute even harder than ever. Solid Energy is powering ahead with a hugely polluting plan to turn lignite into diesel.

    To my mind the apologists for continuing policies that cause climate change are far worse than the sceptics and deniers.

  4. Tom Gould 4

    You can’t blame the oil industry for fighting back. They have their story, and others have theirs. They have been keeping the price of gasoline at an ‘acceptable’ level for years – what the market can stand – for obvious reasons. But that’s just how cartels work. No news there. Problem the environmental doomsayers have is that although people might accept the notion that oil will run out one day, they still need to get the kids to football on Saturday.

    • Afewknowthetruth 4.1

      they still need to get the kids to football on Saturday.

      One day fairly soon you, along with several million other deluded Kiwis, will discover the difference between wants and needs.

      • The Gormless Fool formerly known as Oleolebiscuitbarrell 4.1.1

        2013 at the latest. It is in my diary.

      • Tom Gould 4.1.2

        You have just proven my point. Like suddenly the pumps will run dry one day in 2013, or 2015, or 2018, and all the cars will grind to a halt? Aint gonna happen. Little wonder you guys have a credibility gap that is so easily exploited by the Farrars of this world.

  5. Afewknowthetruth 5

    The peak of conventional extraction was 2005 to 2006.

    Unconventional oil -from tar sands, deep-water drilling etc,- has been propping up the global economy, but is now set for huge problems because the EROEI is so poor and the financial system necessary to fund the infrastrucxture is collapsing.

    Everything is on track for global economic collapse by the end of 2015. (Actually, probably some time soon after the Olympics).

    Meanwhile, climate positive feedbacks have been triggered. The US is burning up as I write…. and summer has only just begun.

    However, the culture of ignorance, complacency and denial remains perfectly intact.

    • Jenny 5.1

      ….. the culture of ignorance, complacency and denial remains perfectly intact.

      afewknowthetruth

      The cowardice of our political leaders is the main reason.

      Even the Greens are infected with this cowardice.

      During the last election the Green Party barely mentioned climate change and certainly didn’t campaign on it.

      Insiders told me that they didn’t want to be seen as “extreme”.

      Getting bums on seats in parliament was more important than confronting climate change.

      I suppose “one day” when they are the government, they will bring it up.

      Of course it will be far to late.

      • “Even the Greens are infected with this cowardice.”

        But they gave us Kiwi Saver?

        We stand a greater chance of getting someone like Hitler in power long before the fuck wit greens get a chance.
        Basically the idiot masses will vote for whoever promises the most, voters are selfish myopic fools, hence we get stupid myopic leaders.
        The greens are only focused on the next 3 years (and counting down to the next election), just like every politician, that is what being a politician is…. they are all shortsighted fucking arsholes .
        And the masses are happy with that.

        • Robert Atack 5.1.1.1

          And now the fuck wits are promoting (to the tune of several million dollars) an annual V8 race in Auckland.
          Clearly the gods are not on our side – and we need bigger statues.Maybe while we still can, we should dig up the last moi from Easter Island and stand it on one tree hill.

      • weka 5.1.2

        “Getting bums on seats in parliament was more important than confronting climate change.”
         
        Would you prefer they told the truth and had no power in parliament? I don’t think we can have it both ways. The Greens’ job now is to get as many MPs as possible. It’s the responsibility of those outside govt to keep the pressure on about climate change etc.

        • Robert Atack 5.1.2.1

          I was called an environmental extremist by the green party in the Liven Chronicle back in 2002-3 ish, can’t remember why now??? might have been something about my oilcrash signs, or my hassling the local candidate? They also got a cop from Wellington to ring me up and ask me not to put any more signs on their signs, I said I wouldn’t do any more after tonight, which happened to be the Thursday before election day, he said he would tell them and get back to me, he never did and I stuck up about 50 signs that night? or was it I drove 50k putting signs over theirs?
          My question to the wankers was and still is – why the fuck was it only me trying to warn the fucking pig ignorant masses? and I was being called an extremist, and they were/still are chasing bums on seats, and playing don’t frighten the horses, as well as encouraging people to place their hard earned money into a ponzi savings scam, that is growth based (and there is no such thing as ‘smart growth’) 100% dependent on the USD.
          The system is morally and energy bankrupt, our leaders don’t know the meaning of the word lead, except in the sentence “lead the lambs to slaughter” our so called ‘leaders’ are Judas scum, it is such a shame they can not be held responsible for their actions IE – Aussie V8s FFS.
          But what the hell we get what society spews up, garbage in garbage out.

        • Jenny 5.1.2.2

          Would you prefer they told the truth and had no power in parliament? I don’t think we can have it both ways. The Greens’ job now is to get as many MPs as possible.

          weka

          The Greens have traded their silence for seats in parliament, for what?

          The Greens will never have enough seats in parliament to make change by themselves. By their own projected 20/30 year time line, by the time the Greens become the majority party in parliament, it will be far too late to do anything meaningful save the climate.

          This means that to really make a difference the Greens will have to win over the rest of parliament from a minority position. Instead of ignoring the issue in the hope of gaining enough seats to be able to force through change against the opposition of the rest of parliament. A better, (and moral) strategy would be to unrelentingly at every opportunity continually challenge the other parties over climate change. Using logical and powerful argument. With the intelligent use of the public pulpit afforded by being in parliament every occasion should be made to win over parliament and the rest of the population as well.

          To keep your silence in the face of disaster gives the impression that the Greens are not that convinced of the strength of their position that climate change is a real phenomenon and a real threat.

          I have often argued on this site that the changes needed to defeat climate change will need to be of the scale of those used to combat fascism.

          These changes were not the work of one party or the other but of parliament as a whole.

          Just as the fight against climate change will not be the work of one party or another, but a coalition of parties.

          It morally behoves the Greens to break their self imposed censorship on climate change and actively and continually challenge parliament and the country.

          To not do this is cowardice and opportunism of the highest order.

          • Colonial Viper 5.1.2.2.1

            national politics will be unable to provide the answers you are looking for.

            • Jenny 5.1.2.2.1.1

              Viper could you expand on why you think national politics cannot provide any answers.

              • Colonial Viper

                Luis de Souza explains it quite well

                Essentially, politicians are chasing the vote of the established “middle class”.

                And the established middle class don’t want anything to intrude on their future entitlement of a very comfortable and easy retirement.

                Hence, recognition of peak oil and climate change is never going to be serious nor lasting in the political class.

                Just like the Roman senators who insisted that the loss of Germania would be temporary and that Rome would, after a brief respite, once again grow to assert her might and power throughout western Europe.

                http://www.theoildrum.com/node/9267

                When petrol hits $4/L watch every NZ politician scramble to greenlight coal to diesel projects. It would be electoral suicide not to do so, after all 😎

                I go with the Archdruid’s approach: change is going to have to be very local. And geared towards surviving the masses of people determined to push the pedal further down even as the cliffs get nearer.

                • Jenny

                  If this is true Viper, then how do you account for such New Zealand political movements like the anti nuclear, or anti apartheid movements, in which according to most commentators the middle classes were overwhelmingly represented?

        • Jenny 5.1.2.3

          It’s the responsibility of those outside govt to keep the pressure on about climate change etc.

          weka

          This is true, but to not have a voice in parliament prepared to raise the issue, makes the struggle of those outside parliament so much harder. In my opinion this is a complete abnegation of their responsibility to the greater environmental movement by the Greens Party.

  6. Afewknowthetruth 7

    Most people are scientifically illiterate and are financially illiterate, and going to learn the hard way.

    http://www.publishme.co.nz/shop/theeasyway-p-684.html

    http://www.publishme.co.nz/shop/theeasyway-p-708.html

    • Jenny 7.1

      Except for a few (mostly middle class), dedicated activists with the time and money, “Most people” with commitments to family and jobs, and with little resources and time are, struggling to keep their jobs, and pay their bills in the midst of an economic recession.

      But this is not the real reason. The fight against fascism was launched during the greatest economic slump in history.

      What is really missing in the fight against climate change, is the political leadership to say “This is important”, “This is dangerous”, and “Your government is going to do something real about it, and needs your help.”

  7. Sanctuary 8

    We will run out of oil one day. Monboit is simply saying we’ve hopelessly underestimated when that day will come and that simply means we are now guaranteeing extinction of possibly all life due to runaway climate change.

    Monboit is also right when he says we will never reduce energy consumption to save ourselves or the planet. The more likely outcome is Malthusian collapse accompanied by endless wars for scarce resources. The winners, as always, will be the tooled up rich nations who will simply take what they need with fig leafs of justification.

    I think that the environmental movement has to face the fact that their campaign objectives in relation to climate change – reduced consumption, move away from fossil fuels, population reduction – have been completed routed by a powerful propaganda campaign run by large corporations who have successfully taken a scientific debate and polarised and politicised it. The corporations have succeeded in making belief in climate change a matter of political persuasion.

    In WWII Roosevelt was wise and realistic enough to know that fighting to defend freedom and democracy wasn’t enough, if he was harness American industry to the war effort he had to let them make money out of it as well. In contrast, the environmental movement has been foolish and unrealistic enough to expect the state to regulate powerful energy cartels and other corporations and expect them to simply accept that in the interests of the planet. I personally think that this fatal, basic mistake was probably inevitable given the anti-industrial, anti-corporate and anti-technology roots of the environmental movement.

    The only way forward now to save the planet from cataclysmic climate change is a radical change in tactics. Geo-engineering the planets climate, looking for technological solutions to extract CO2 from the atmosphere, research into moving extractive industries off planet, that sort of thing. Spending money via huge government contracts to corporations to develop and build space elevators to assemble a giant sun shield probably has more chance of reducing the planets temperature by 2-5 degrees than trying to stop people buying cars and using electricity generated by coal fueled power stations.

  8. BM 9

    I like the look of this, you can use existing infra structure and it’s pretty much pollution free.
    Hopefully something like it appears in NZ in the not too distant future.
    http://www.clearedgepower.com/residential/clearedge5-home-fuel-cell

    • jaymam 9.1

      That unit appears to burn natural gas, rather than a power station doing the same. Where’s the advantage?

      Whisper Tech would use any fuel, e.g. waste wood to generate power and heating for a home. What an excellent idea. But Meridian has just got rid of Whisper Tech:

      http://www.meridianenergy.co.nz/company/news/media-releases/company/whisper-tech-s-operations-transition-to-target-market-in-spain/

      • BM 9.1.1

        I have a sneaking suspicion you didn’t actually read anything on that web page.

        As electricity is generated through an electrochemical process that does not involve combustion (unlike traditional power plant generated electricity), it produces neglible amounts of pollutants and reduces your carbon emissions by up to 40%. Moreover, as heat is produced as a byproduct of the electrochemical reaction, the unit also produces enough excess heat to warm about 750 gallons of water — enough to heat your pool or domestic hot water supply. When used for both electricity and heat, the ClearEdge5 operates at 90% efficiency and can cut your energy costs by as much as 50%.

        • jaymam 9.1.1.1

          Of course I read the link. It says:
          “About the size of a refrigerator, the ClearEdge5 fuel cell hooks up to your natural gas supply…
          …it produces neglible amounts of pollutants and reduces your carbon emissions by up to 40%”

          Are you teling me that it doesn’t create any of that nasty CO2? What does it do with the carbon in the natural gas?

  9. aerobubble 10

    foolish. Look you big industrialists loves government wealth as much as it loves buying up cheap
    alternative energy companies. The recent explosion of tar and fraking and the dropping off of subsidies to alternative energy is merely big oils final admission that peak oil exists and their play on
    cornering the largest stake of the new gold rush. They will do anything to stop home based energy
    solutions like water meter companies hate roof water tanks.

    This is just all about positioning of big oil in a peak oil world. And once they have the tech and the subsidies then they will rightly move to crush private car ownership and be well ensconced for the prime position, having both old oil and new energy in their portfolio.

    Get with the program, Key is nothing more than a stoolie for the big end of town.

  10. Peter 11

    I was very disappointed to read that by Monbiot. Of course the presumption that there isn’t an oil supply problem is false, peak oil is very real. What isn’t real are either the IPCC assumptions about oil supply that are in many cases more optimistic than even the oil companies assessments. It says something when reserve assumptions are based on the premise that the only limits on reserves are human laws and behaviour. The ignorance of geology is astounding.

    However the real issue here is the double-counting of fuels. The global fuel supply seems to keep on rising, despite static production of conventional oil (and slowly rising non-conventional oil). Why is this?

    It’s due to the way we currently count “fuel”. When we count it, we only take the final volume of liquids, regardless of how they were produced. In other words, if we used 1 litre of diesel to heat up oily tar sands from Canada, then we’d wind up with 2 litres of non-conventional oil. The trouble is, the way national fuel accounting works, that 2 litres of oil (which is really 1 litre of extra oil), is recorded as 3 litres. The subtractions for energy conversion aren’t happening.

    That’s the heart of the problem.

  11. Johnm 12

    Peak Oil has happened. Old giant fields are in relentless decline: Canterell, North Sea, Saudi Arabia, Alaska. However alternative liquid fuels and hard to get oil with very poor eroei (Energy Return on Energy Invested) are working hard to make up the depletion rate leading to flat line production (In itself is insufficient to keep the oil age going because up ’till 2005 since the end of WW11 we have had exponential production increases yearly keeping the price down to ridiculously cheap levels under $20 a barrel) This can’t go on and the big depletion rates will eclipse our efforts to cover them it’s when not if…This year, next year?

    refer this article of Heinberg’s which refutes the assertion that PO is still well in the future:

    Link: http://www.postcarbon.org/blog-post/985668-peak-denial

    “Meanwhile, soaring oil prices and plummeting real energy yields from liquid fuels have already left economic carnage in their wake, as a fragile global financial system perched on a Matterhorn of debt has been dealt blow after blow by the failure of the real economy to expand as expected. It turns out that industrial production and global trade depend on energy, not just credit and confidence. June saw weaker oil prices—but this was due to an accelerating erosion of world economic strength (leading to expectations of falling oil demand), not to moderating petroleum production costs or substantially increasing production.”

    “In short, things will go better for us if we resist denial rather than engaging in it.”

    Articles like this are eroding Monbiot’s reputation of being on the ball, he has shown here a lack of understanding and judgement obvious to the most casual understanding of these issues.

    However though we are on the decline side of Hubbert’s curve if we use all of the rest of the available fossil fuels he’s 100% right that it’ll “Fry us” !

    • Colonial Viper 12.1

      You cant blame Monbiot for being part of the comfortable upper middle class wanting to find reasons for why his decent and secure lifestyle his safe going forwards.

      Good point – flat liquid fuels production levels are being maintained by more and more low EROEI alternative liquids.

      So the total energy available to the wider economy is declining, even as the volumes of fuel produced remain fairly flat.

    • Johnm 12.2

      Here’s Monbiot’s article in Commondreams.org
      What is most interesting are the intelligent comments, over 90, following: here is the link if you wish to see both:

      http://www.commondreams.org/view/2012/07/03-5

      • Johnm 12.2.1

        Particularly good comment:

        NC_Tom
        “Hubbert’s peak, the famous bell-shaped graph depicting the rise and fall of World oil, is set to become Hubbert’s Roller coaster.”

        Yea, I tend to agree with his conclusion. Although there is a finite amount of oil in the ground, as technology improves and the price of oil goes up the bastards will be able to get the stuff out of the ground in places they simply couldn’t before.

        Of course peak oil on a finite planet must be true, but if I had to bet which will kill destroy us first, my chips are moving from peak oil to climate change. I mean look around, they are stripping northern Canada for the Tar Sands, destroying jungles to plant palm and cain sugar for bio fuels, and going nuts in this country going after oil in North Dakota, etc. Then look at the weather we’ve been having over the last decade. Weather is getting worse at almost an exponential rate.

        If the capitalists can keep the black stuff flowing at close to current rates for another 10 or 20 years, can you imagine what the planet will be like? I don’t think that I can…

    • weka 12.3

      “Articles like this are eroding Monbiot’s reputation of being on the ball, he has shown here a lack of understanding and judgement obvious to the most casual understanding of these issues.”
       
      Bizarrely so. It makes me wonder if he is simply so freaked out by what he knows about global warming that he is now grasping at straws and either using dubious data intentionally as a tool to make the climate change situation even more explicit, or he’s experiencing enough cognitive dissonance that it’s led him to such a poor intellectualisation.
       
      We are so far beyond saving ourselves from climate change now. I don’t know what effect that would have on someone like Monbiot. Given enough time, is there anything else that can be said other than we’re all fucked. It’s either that, or skewing the data to maintain sanity or some semblance of hope.

  12. captain hook 13

    farar is just another rubber chicken sausauge roll stuffer sucking on the tit who thinks that any diminution of the oil companies attack on the environment will result in the collapse of his own personal food supply.

  13. exitlane 14

    George “the reverse Cassandra” Monbiot has been sucked in by the US- centric shale oil bonanza hype. Simple as that

    David Strachan sums up the reality of “peakonomics” here..
    http://www.davidstrahan.com/blog/?p=1562
    “Slower oil production combined with intensifying competition among consumers may soon produce oil prices so high they kill all prospect of sustained economic growth. The outlook is for repeated oil price spikes alternating with deep recessions, regardless of when global output actually peaks. Welcome to the last oil shock.”

    If Monbiot had researched a little more thoroughly he would have discovered the issues which are at the heart of the peak oil debate

    First is that the rapid depletion of older existing oil fields is what is driving the oil price upward. As a result of depletion an IMF paper predicts prices to double by 2020

    Second the so-called shale oil “bonanza” is not backed up by hard data. The IMF team expects total oil production (including shale and tarsands) to grow at no more than 0.9% per year for the next decade, way below the historical average of 1.5%-2%, and therefore insufficient to sustain economic growth.

    Third … non-OECD oil consumption has risen around 4.8 million barrels per day since 2008, while OECD consumption has fallen by almost exactly the same amount. “China is bidding away the OECD oil supply” says oil analyst Mr Steve Kopits quoted in in the Strachan article, “and recessions are the mechanism by which that oil is being transferred from weaker economies to faster growing economies”.

    Fourth …major oil producers such as Russia and Saudi Arabia are canabalising their own supply to meet soaring internal demand, leaving less and less for export. Saudi Arabia will be a net importer by 2038 if current trends continue.

    MED industry-supplied data shows NZ domestic production has already begun a steep decline and will be near zero by 2020. This will force NZ to be ever more dependent on ever more expensive oil imports at the worst possible time in the next decade. Even if we found a super field tomorrow it would take a decade to bring it to full prodcustion and we would still pay the international oil price. Meanwhile China and India are already taking an ever larger slice of available net world exports. How exactly is NZ going to secure a share of this diminishing market? Send a frigate?

    Finally Monbiot glosses over the recession-inducing impact of even $US80-$90 a barrel oil. Economic peak oil is the point at which the cost of supply exceeds the price economies can pay without destroying growth at a given point in time. For mature economies such as in the OECD that unaffordable price and trigger point for recessions is around $US80 – $US90 a barrel, or historically when 4% – 5 % of GDP is spent on oil. 10 of the last 11 global recessions are linked to oil supply/ price shocks ( US economist James Hamilton ) and the current recession and that in 2008 have oily fingerpints all over them.

  14. captain hook 15

    whales are renewable resouces (?) but they can be made extinct.
    Oil is non renewable but it will never run out. (ever)
    but the damage it does to the environment and human life may very well make all us humans extinct too.
    what we all need is a good 10c cigar.

  15. Afewknowthetruth 16

    Emeritus professor Guy McPherson will be on Kim Hill’s show this Saturday, and will be discussing the latest data and projections, following on from a successful N.I tour.

    Nelson/Takaka shortly.

    http://guymcpherson.com/coming-events/

  16. Afewknowthetruth 17

    PS. It was great being able to have extended conversations with someone who knows what he is talking about. We’re pretty much on the same page, almost the same line of the same page.

  17. Afewknowthetruth 18

    Move along. Nothing to see here:

    http://nsidc.org/arcticseaicenews/

    because, as climate change (global warming) deniers keep telling us, “we’re headed into an ice age”.

    Perhaps they mean a lack-of-ice age when they say that.

    Those positive feedbacks -albedo effect, entrapped CO2 and CH4, and methane clathrates etc. ‘will be loving’ the warmer temperatures.

    We’re on track for a largely, if not totally uninhabitable planet for most mammalian species by the middle of this century. But we cannot allow that to interfere with ‘the economy’, can we? I see the BoE has announced its latest attmept to ‘kick start’ economic growth via more fraudulent money creation.

    It is abundantly clear that this will all end very badly.

  18. Afewknowthetruth 19

    Nothing to see here, either:

    http://droughtmonitor.unl.edu/

  19. Why is there no open mike today?

     

  20. Mike 21

    Sorry if already posted, but the video tutorial/lecture “Arithmetic, Population and Energy” by Dr Albert Bartlett is an excellent, easy to understand explanation of the exponential function and also how it relates to peak oil. A quote from it is “One of the greatest shortcomings of the human race is our inability to understand the exponential function”

Recent Comments

Recent Posts


History

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    2 hours ago
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    3 hours ago
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    8 hours ago
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    22 hours ago
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    23 hours ago
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    1 day ago
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    2 weeks ago
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    2 weeks ago
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  • Government handling of Kermadecs threatens Treaty rights
    ...
    2 weeks ago
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    2 weeks ago
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    2 weeks ago
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    2 weeks ago


History


History


History