Even the IMF is starting to get peak oil

Written By: - Date published: 7:58 am, April 10th, 2011 - 40 comments
Categories: economy, energy, leadership, sustainability - Tags: ,

We’ve long had warnings from scientists and greens. Right wing governments never listen to those. But recently we’ve also had warnings from organisations that you might think that any government would pay attention to. Like the warning from the American military — by 2015 there are likely to be “serious shortages” in oil supply. Like the warnings from the German military, Lloyds of London, the IEA and others (reviewed in a report from our own Parliamentary library). Now we can add the IMF to the list:

WSJ: IMF: “Increased Scarcity” Ahead For Oil Markets

Governments should brace for “increased scarcity” in global oil markets and the risk of additional sharp price spikes in the coming years, the International Monetary Fund warned Thursday. …

The fund urged policymakers around the world to ensure their economies are designed to handle unexpected changes in oil supplies and prices–for instance, by reducing fuel subsidies in order to protect governments’ fiscal positions but also strengthening safety nets for the poor–and to encourage policies promoting alternative energy sources.

I do hope that one of our elected representatives is going to stand up in Parliament and ask the government how it plans to respond to the IMF’s advice. What action is the government taking to ensure that our economy is “designed to handle unexpected changes in oil supplies and prices”? In what way is the government “strengthening safety nets for the poor” or “promoting alternative energy sources”?

The Nats will bluster and evade, because of course they have no sensible answers to these questions. It’s up to the other parties. Come November, any party that doesn’t have good answers to these questions isn’t worth voting for.

40 comments on “Even the IMF is starting to get peak oil ”

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  1. mouse 1
    10 April 2011 at 8:59 am

    Rob…The WSJ atricle is is only available to subscribers… this here links to the full article on the IMF website…>

    http://www.imf.org/external/pubs/ft/survey/so/2011/RES040711A.htm

    PS. Joyce and Guy would have to either Blind or Stupid to continue with their RONS nonsense.

    • r0b 1.1
      10 April 2011 at 10:07 am

      Thanks for that mouse.

      The WSJ article was freely visible when I wrote the post (last night), a pity that they’ve hidden it away.

      • Robert Atack 1.1.1
        11 April 2011 at 7:51 am

        The IMF quot was freely available on The Standard on Saturday
        but ended up being cut ?

        Robert Atack 2
        9 April 2011 at 6:59 am
        Such a shame I can’t make money out of I TOLD YA SO 😉

        WASHINGTON (AFP) – The International Monetary Fund warned Thursday that nations should brace for dwindling oil supplies that could drive prices skyward as demand increases, especially in emerging economies .

        [deleted]

        http://news.yahoo.com/s/afp/20110407/bs_afp/imfeconomyoilemerge

        [lprent: Do not cut and paste here. We are interested in your opinions. Link to news or opinion that is available on the net. Wasting my time cleaning this up is a fast way towards collecting a ban. ]
         
        captcha – rules

        • lprent 1.1.1.1
          11 April 2011 at 10:07 am

          Depends when we go through and do moderation sweeps. In this case I was rather busy all weekend.

          But we usually will cut cut’n’pastes of material that is available elsewhere on the net regardless who it comes from.

          The idea if you want to draw everyones attention to something. Write you own opinion on it, do some small relevant quotes, and link to it. Then people can decide to read it or not. But don’t just dump screeds of stuff on the site because it is a pain in the arse for people who have to scroll past it.

          We will sometimes leave material that cannot be found with a quick google of a sentence – usually where the original is only available on hardcopy. But even then, state that is the case or it may get cut anyway.

          If we have to spend too much time with someone doing it repeatably, then eventually it becomes too much of a nuisance and we’ll remove the problem with a ban. It is our precious moderation time that you wind up wasting.

    • Draco T Bastard 1.2
      10 April 2011 at 1:33 pm

      PS. Joyce and Guy would have to either Blind or Stupid to continue with their RONS nonsense.

      Hanging on tight to their ideology and doing everything they can to disbelieve reality.

  2. Bored 2
    10 April 2011 at 9:07 am

    I do hope that one of our elected representatives is going to stand up in Parliament and ask the government how it plans to respond to the IMF’s advice.

    Fat chance from either side of the house. Neither side has a changed paradigm and despite growing awareness both are in denial. We are likely to get the techno salvationist cornucopian response from all parties. And calls for growth. To informed observers watching our leaders is like watching a ball on the Titanic, first class only allowed on that deck…its both tragedy and farce tinged with social nastiness.

    Now more than ever calls for a managed response to energy contraction, and socially responsible responses to the consequent pain.

  3. outofbed 3
    10 April 2011 at 9:26 am

    It seem the Green Party are right  about oil they have been banging on for 20 years,
    Maybe we should start listening to them?
     

    • weka 3.1
      10 April 2011 at 9:42 am

      Indeed outofbed.

      I just did a google by site search for “peak oil” for the Labour, Nats, Greens and Maori Party websites.
       
      Labour and National return zero hits.
      The Maori Party return 3 hits
      The Greens return 9,780 hits.
       

      • Robert Atack 3.1.1
        11 April 2011 at 8:05 am

        About 6 years ago I was at the meeting with Fitzsimons, I had printed all the peak oil info from their site which filled 4 pages, I showed the audience this pathetic display of information, then I showed them all the info on Marijuana from the green website, stuck together it was over 5 meters long.
        And they still encourage people to invest in the growth based savings scam Kiwi Saver. For an 18 year old to get a payout from this utter lie in 47 years is clearly imposable.
        Fitsanything said at the time “I don’t look at the website”   
        How do they live with themselves
         
        We are screwed

        capticha Definite

  4. weka 4
    10 April 2011 at 9:38 am

    “What action is the government taking to ensure that our economy is “designed to handle unexpected changes in oil supplies and prices”?”

    What action can they take given that our ecomony is based on oil that can’t be replaced with alternativess (tourism and exports)? (not a rhetorical question)

    I’m neither expecting or waiting for the government to take the lead on peak oil. The people leading the way on this have been working on the issues from within the commuities for years in preparation. They’re in every community now and have more skills, knowledge and experience than you will find in parliament.

    Having said that, we do need a tipping point in the general public. The Greens have peak oil at the top of their energy policy and if they can get their shit together this election they may get peak oil firmly in the public eye.

    http://www.greens.org.nz/policy/energy-policy

    • Afewknowthetruth 4.1
      10 April 2011 at 11:45 am

      weka.

      That link shows how on the ball the Greens are (not!). Four years since they updated (2007).

      And they are promoting delusional nonsense.

      Examining the role of direct electric power, biofuels, and hydrogen from renewable energy for public transport and essential transport services;

      Anyone with a brain knows biofuels are an impossibe dream and that hydrogen for transport is pure science fiction. 

      It just confirms that the Greens are away with the fairies. I guess that is what makes them appealing to some voters: they offer delusions rather than reality.

      • sean 4.1.1
        10 April 2011 at 2:15 pm

        Your commenting on the wrong website – everyone here is full of idealogical delusions of grandeur.
         
        You will find people suggesting that building a fast rail network will solve all our problems – even though it will cost on order of $100 billion and will never come close to covering its costs.
         
        Sadly most of the commenters here do not have a clue about economic realities, hence their voting preferences.

        • felix 4.1.1.1
          10 April 2011 at 7:14 pm

          The phrase “covering its costs”.
           
          What did you intend to mean by this exactly? (serious question)

      • Rich 4.1.2
        10 April 2011 at 4:44 pm

        Odd that “impossible” biofuels make up around 3% of NZ petrol sales, then.

        • Lanthanide 4.1.2.1
          11 April 2011 at 11:11 am

          Lets see the country run on only biofuels. That’s what he means by “impossible”.

      • weka 4.1.3
        10 April 2011 at 8:06 pm

        “That link shows how on the ball the Greens are (not!)”
         
        You’re missing my point (again) afktw. I’m not saying that the Greens have an optimal PO policy, or even a particularly good one, but at least they have one. I’m saying that they’re the ones most likely to keep the issue in the mainstream view and thus help shift public awareness (and it’s worth voting for the solely for that IMO, the more MPs they have the more this can be talked about).
         
        Further, if a party was to adopt the approach that you have, and was to acknowledge that biofuels are a useless approach and we’re generally in deep shit, no-one would take any notice because it’s too much for most people to manage internally. Yes, by all means keep yelling from the margins, we need that too. But in mainstream politics, the only people that will be allowed power are the mainstream. So you  have to find the voices within the mainstream that can speak about PO in a way that will be heard *and* will shift awareness.
         
        Like I said, I’m not waiting for parliament to lead on this. I’m working with other people in the community who are already doing the necessary work.
         
         

  5. infused 5
    10 April 2011 at 10:00 am

    Need to let nature take its course. We will never change. We only change when it’s too late.

    This link is quite good

    http://www.futuretimeline.net/21stcentury/2010-2019.htm#economy

    • r0b 5.1
      10 April 2011 at 10:10 am

      That’s a bit too bleak for me infused.  I feel the need to fight the good fight, even though at this stage I don’t see any realistic chance of averting environmental and economic disaster.

      PS – your link is broken?

      • infused 5.1.1
        10 April 2011 at 4:01 pm

        Nope? Good read about the future of oil and climate change. I think a lot will ring true.

        Change will only happen after we need to change. It’s how mankind has always worked.

      • ChrisH 5.1.2
        10 April 2011 at 4:49 pm

        Link worked for me now. A bit more optimistic than what Infused says. Sounds like the race between civilisation and disaster will continue as per the last 100 years.

  6. Afewknowthetruth 6
    10 April 2011 at 10:59 am

    ‘We’ve long had warnings from scientists and greens. Right wing governments never listen to those.’

    Firstly. the Green Party of NZ were aware of imminent peak oil as long ago as 1999 and chose not to mention it for 6 years, then they proposed a whole load of drivel about bioduels ‘saving us’.

    Secondly, the government of Helen Clark was repeatedly warned about the ramifications of Peak Oil: that government trivialised the whole issue, then ignored it. Presumably, by Rob’s definition, the Helen Clark government was a right wing government  -which it was, since it promoted ‘free’ trade, globalisation, further transfer of power to the international banking sector, looting of NZ resources by multinational corporations and environmental destruction.

    Interestingly, the Maori Party were onto the issue for a few years, but then sold out to the neofascists. Their PO co-ordinator resigned in disgust.

    That leaves scientists, who HAVE been warning about the ramifications of Peak Oil for decades  -and have been ignored for decades, going right back to M. King Hubbert in 1956. 

    The Hirsch Report to the US government of 2005 (buried, of course) indicated a 20 year lead time to transition away from oil dependence. Both Labour and National ignored that warning. With the actual peak of conventional extraction around 2005-6, strategies for transitions needed to have been implemented from 1986 onwards. That puts us about 25 years behind at this point of time .

    So here we are, pretty much totally screwed by our so-called leaders and now falling straight off the cliff (the next round of demolition of the world economy is underway) with clueless clowns and criminlas in power, and the prospect of another bunch of clueless clowns and criminals coming into power later in the year.

    The people of NZ should be terrified, since Peak Oil means collapse of everything -financial markets, employment, the food supply. But they’re not. Most of them couldn’t care less. As long as they can sit down with a beer to watch rugby they’re happy to see their futures destroyed.

    One thing you can be sure of: the IMF warning will have no effect, and the government and local councils will continue to implement policies based on delusional nonsense until they can’t. More roads for vehicles with no fuel, more houses for people with no food, more shopping malls for people with no money, more airport upgrades for planes that won’t be flying.  That’s the system. 

    However, I must commend The Standard for raising the matter several times.

    • Jenny 6.1
      10 April 2011 at 9:32 pm

      Some good news

      Greenpeace and te Whanau a Apanui successfully delay these idiots plans to wreck the planet.

      Government appointed liar for Energy and Resources Hekia Parata said she is “disappointed”.

      It is early days. But I can’t help wondering how great her disappointment would be, if this protest movement grew to the size and power of the anti-apartheid protests, or the anti-nuclear protests, or the anti-schedule 4 mining protests.

      Here’s hopeing.

  7. Spam 7
    10 April 2011 at 11:09 am

    http://en.wikipedia.org/wiki/Pearl_GTL
    Gas To liquids: Important point from this is that gas to liquids is economically viable at an oil price > $40 / bbl.

    http://www.eia.doe.gov/oiaf/ieo/nat_gas.html
    Natural Gas Reserves:  Reserves are > 6,609 tcf, and growing.  With consumption at 108 tcf / annum (expected to grow to 156 tcf by 2035), looks like the world has 40 – 60 years of gas supply even if there is no more discoveries.  Which won’t happen.  Then, there is also coal to liquids, with even higher coal reserves.
    Fossil fuels will be around for a long while yet.

    • Draco T Bastard 7.1
      10 April 2011 at 1:58 pm

      It’s not that fossil fuels won’t be around but the fact that there won’t be enough to maintain the growth that’s used to hide the fact that capitalism is a Ponzi Scheme that benefits the few at everyone else’s expense.

    • Afewknowthetruth 7.2
      10 April 2011 at 2:00 pm

      Gas to liquids processes have an energy efficiency of about 50%. In other words you lose 50% of the energy in the process and double the greenhouse gas emissions. That’s apart from the monstrous expense involved in building the planet. The last time NZ went down the ‘Think Big’ road it nearly crippled the nation and led to a massive currency devaluation.

      Coal reserves are vastly overestimated and we are well past peak high quality coal. However, if you are prepared to risk the lives of miners as per Pike River, or blow mountains to pieces and crate a moonscape, as they are doing in the US there is still a bit left to extract.  On the other hand, the continued use of coal is just about the fastest way known to completely wreck the habitability of planet we live on via abrupt climate change, acidification of the oceans and mercury poisoning.

      Such is the level of desperation to keep cars running, there will undoubtedly be plenty of madmen (and women) who will support the insanity of trying to prop up present arrangements, whatever the cost. And corporations like ExxonMobil, BP and Shell will be very happy to wreck the planet for you, whether by conventional oil or unconventional oil.   

      I’m glad I won’t be around to see the all environmental consequences of the industrial disease that has a stranglehold grip on the minds of so many people. What we are seeing already is bad enough.

      Pity the next generation.

      • Spam 7.2.1
        10 April 2011 at 2:32 pm

        Which just reinforces the fact that “peak oil” is just dressed-up environmentalism.  It doesn’t rebut the point that ‘peak oil’ is not energy Armageddon.
        Efficiencies are actually higher than that (60% and increasing), and there is obviously a lot of incentive to work to increase them.

        • Draco T Bastard 7.2.1.1
          10 April 2011 at 3:25 pm

          Which just reinforces the fact that “peak oil” is just dressed-up environmentalism.

          No, it doesn’t. Peak Oil is a physical fact and not a part of environmentalism. It’s just that the environmentalists have actually paid attention to it and all the other delusional idiots haven’t.

          Efficiencies are actually higher than that (60% and increasing), and there is obviously a lot of incentive to work to increase them.

          There may be incentive but that doesn’t mean that that amount of energy loss will be overcome and, in the meantime, we have much better things to do with that energy.

          • Colonial Viper 7.2.1.1.1
            10 April 2011 at 4:16 pm

            Efficiencies are actually higher than that (60% and increasing), and there is obviously a lot of incentive to work to increase them.

            The amount of GDP that we get per unit of energy has indeed gone up by about 1.3x or 1.4x since the 1970’s. That is indeed efficiency gains at work.
             
            Small problem though. In order to beat both declining oil production and increasing oil costs AND maintain GDP at current levels, efficiency gains need to hit 20x or more over the next 30 years.
             
            Energy efficiency improvement like that has *never* before been achieved in the history of human-kind.

            The Club of Rome was right. The only way for our civilisation to escape a crushing energy hit in the future was to dedicate major resources to managing and mitigating the problem from the late 1970’s onwards. This of course was not done.

    • south paw 7.3
      10 April 2011 at 2:02 pm

      Those fossil fuel alternatives have severe limitations. They are not a replacement for the low hanging fruit of sweet crude that civilisation is premised on.

  8. mikesh 8
    10 April 2011 at 12:32 pm

    I do hope that one of our elected representatives is going to stand up in Parliament and ask the government how it plans to respond to the IMF’s advice.

    If anyone does ask that question it will present the government with a golden opportunity to promote oil exploration off the east cape.

    • Sookie 8.1
      10 April 2011 at 7:25 pm

      The answer to that is NZ won’t get access to cheap oil by extracting its own, as a) the company that extracts it will be an overseas company as we don’t have the skills/capital, and b) our petrol price is determined by the international oil market. Deep sea drilling is sod all use to NZ except for a few bucks in royalties which the winning company will try to dodge anyway, and a few jobs. It’s exactly the same as the bullshit mining on conservation land pot of gold story last year.

  9. Gareth 9
    10 April 2011 at 1:42 pm

    The Government still has it’s head in the sand over NZs oil dependence, despite all the international evidence coming from highly credile sources like the IMF. Lacking a plan, the Government is pouring $10 billion in motorways making us more vulnerable nationally and not providing realistic alternatives for households feeling the pinch at the pump.
    I’ve asked Bill English a series of questions over the last month in Parliament on oil and will keep it up.
    11 March: http://www.greens.org.nz/oralquestions/gareth-hughes-minister-finance-fuel-price-increases

    16 March: http://www.greens.org.nz/oralquestions/gareth-hughes-questions-minister-finance-peak-oil

    7 April: http://www.greens.org.nz/oralquestions/q9-gareth-hughes-minister-finance-oil-prices-and-government-investment
     

  10. uke 10
    10 April 2011 at 4:32 pm

    My suggestion for topographically flat cities like Christchurch is a mass conversion from car to cycle rickshaw , for commuter, taxi, and light good transport.
     
    Cycle rickshaws could also be used in much of downtown Wellington, including to and from the airport. (Perhaps with a sail attachment.)

  11. M 11
    10 April 2011 at 4:49 pm

    Yeah, nice one IMF and thanks to Robert Atack for posting the link yesterday on Open Mike. I know Robert personally and he drops off DVDs that may be of interest to me on PO and environmental concerns and is actually very personable even if he does come off as stringent in print. 

    I see things roughly in the same vein as Robert, Afewknowthetruth and infused but tend to keep a lot of this to myself as I have kids. I have pressed home the message though that next five years will be very different from the last five years and that I expect few people will be running cars within the decade. People will not accept the need for parsimony until it’s well past due. I’m coming around to Draco’s view of a universal income so that people will have the basics covered and will hopefully be able to live in modest but dignified comfort.

    Seeing ads on the TV for things like Masterchef, unnecessary house renovations or worse, building of outrageous-sized, ego stroking monstrosities of houses only serves to make me think how people in a few years’ time will realise how crazy and deluded they were. Seeing chefs chiding people about how something was not cooked to perfection will seem the ultimate wank when the masses will be clamouring for something to line, let alone fill their stomachs.

  12. RedLogix 12
    10 April 2011 at 4:58 pm

    Gee what’s going on at the IMF?
     
    Last week socialism suddenly came back into favour; this week it’s sustainable energy… next week is going to be biodynamic organics?

    • locus 12.1
      11 April 2011 at 7:30 am

      This is not about what’s suddenly in favour.  This is deadly serious and an ever growing concern. 

      NZ is wasting an incredible opportunity to build a future which is less reliant on fossil fuels.  If we had any desire to protect our grandchildren and future generations we would be demanding that every cent of the royalties and taxes from oil companies is spent on the development of renewable energy resources.
      http://www.3news.co.nz/Govt-welcomes-Maari-oil-royalties/tabid/421/articleID/92882/Default.aspx
      “The Crown is estimated to get $1.5 billion in royalties from the Maari field which is expected to yield 50 million barrels of oil in its 10- to 15-year life span.” 
      The Maari field is just one of NZ’s producing oilfields, albeit currently the largest. The total royalties (which oil companies cannot wriggle out of) over the next 15 years could exceed $3billion…and this amount doesn’t include the tax paid by these companies.

      Just imagine what NZ could achieve if this $3billion was totally dedicated to  the development of sustainable energy.  Of course this won’t happen as NZ governments rely on the cash to pay for the yearly running costs of health, social welfare, education etc… 

      It is incredibly sad to see the short-sighted way most nations exploit their non-renewable energy resources without investing in the future… and particularly in the future of the regions where the resources are being mined.  

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