From the Guardian: George Monbiot on Peak Oil

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From the Guardian: George Monbiot on Peak Oil

Postby Bismillah » Tue Sep 27, 2005 10:07 am

<!--EZCODE AUTOLINK START--><a href=",5673,1578885,00.html">,00.html</a><!--EZCODE AUTOLINK END--><br><br>It's better to cry wolf now than to wait until the oil has run out <br><br>No one knows how much is left, but humankind can't wait any longer before coming up with alternatives <br><br>George Monbiot<br>Tuesday September 27, 2005<br>The Guardian <br><br><br>Are global oil supplies about to peak? Are they, in other words, about to reach their maximum and then go into decline? There is a simple answer to this question: no one has the faintest idea.<br><br>Consider these two statements: 1. "Last year Saudi Aramco made credible claims that as much as 500bn-700bn barrels remain to be discovered in the kingdom." 2. "Saudi Arabia clearly seems to be nearing or at its peak output and cannot materially grow its oil production."<br><br><br>Article continues<br><br>--------------------------------------------------------------------------------<br><br>--------------------------------------------------------------------------------<br>The first comes from a report by Energy Intelligence, a consultancy used by the major oil companies. The second comes from a book by Matthew Simmons, an energy investor who advises the Bush administration. Whom should we believe? I have now read 4,000 pages of reports on global oil supply, and I know less about it than I did before I started. The only firm conclusion I have reached is that the people sitting on the world's reserves are liars.<br>In 1985 Kuwait announced that it possessed 50% more oil than it had previously declared. Had it just discovered a new field? Had it developed a new technology that could extract more oil from the old fields? No. Opec, the price-fixing cartel to which it belongs, had decided to allocate production quotas to its members based on the size of their reserves. The bigger your stated reserve, the more you were allowed to produce. The other states soon followed Kuwait, adding a total of 300bn barrels to their reserves: enough, if it existed, to supply the world for 10 years. And their magic oil never runs out. Though extraction has long outstripped discovery, Kuwait posts the same reserves today as it claimed in 1985.<br><br>So we turn to the US Geological Survey for an answer, and find that its estimates of global oil supply are as reliable as the Pentagon's assessments of Iraqi weapons of mass destruction. In 1981 it said we possessed 1,719bn barrels of oil. In 2000, 2,659. Yet the discovery of major oilfields peaked in 1964. Where has it come from?<br><br>It is true to say that oil reserves are not fixed. As technology improves or the price increases, oil that was formerly too expensive to extract becomes available. But the oil geologist Jean Laherrère points out that the survey's estimate "implies a five-fold increase in discovery rate and reserve addition, for which no evidence is presented. Such an improvement in performance is in fact utterly implausible, given the great technological achievements of the industry over the past 20 years, the worldwide search, and the deliberate effort to find the largest remaining prospects."<br><br>The current high oil prices are the result of a shortage of refineries - exacerbated by the hurricanes in the Gulf of Mexico - rather than a global shortage of crude. But behind that problem lurks another. Last week Chris Vernon of the organisation PowerSwitch published figures showing that while total global oil production has risen since 2000, the production of light sweet crude - the kind that is easiest to refine into motor fuels - has fallen, by 2m barrels a day. This grade, he claims, has already peaked. The refinery crisis results partly from this constraint: there aren't enough plants capable of processing the heavier grades.<br><br>And next in the queue? Who knows? All I can say is that George Bush himself does not appear to share the US Geological Survey's optimism. "In terms of world supply," he said in March, "I think if you look at all the statistics, demand is outracing supply, and supplies are getting tight." What has he seen that we haven't?<br><br>If the figures have been fudged, we're stuffed. That might sound extreme, but it is not my conclusion. It is that of the consultants hired by the US department of energy. In February this year the department released a report called Peaking of World Oil Production: Impacts, Mitigation and Risk Management. I say "released", for it was never properly published. For several months the only publicly available copy was lodged on the website of the Hilltop high school in Chula Vista, California.<br><br>The department's consultants, led by the energy analyst Robert L Hirsch, concluded that "without timely mitigation, the economic, social and political costs will be unprecedented". It is possible to reduce demand and to start developing alternatives, but this would take "10-20 years" and "trillions of dollars". "Waiting until world oil production peaks before taking crash programme action leaves the world with a significant liquid fuel deficit for more than two decades", which would cause problems "unlike any yet faced by modern industrial society".<br><br>Of course, we have been here before. Oil analysts and environmentalists have warned of disappearing reserves ever since drilling began, and they have always been proved wrong. According to people such as the Danish statistician Bjorn Lomborg, this is because the industry is self-regulating. "High real prices deter consumption and encourage the development of other sources of oil and non-oil energy supplies," he says. "Since searching costs money, new searches will not be initiated too far in advance of production. Consequently, new oilfields will be continuously added as demand rises ... we will stop using oil when other energy technologies provide superior benefits."<br><br>It is beginning to look as if he is wrong on all counts. As the Economist magazine pointed out on September 10, "demand for petrol is pretty inelastic in the short term", because people still have to go to work, however much it costs. According to the analyst it cites, "it would take a doubling of petrol prices to reduce American petrol consumption by just 5%".<br><br>Lomborg's idea that companies can just go out and find new oil when demand rises suggests that he believes geology is as malleable as statistics. One day - or so we should hope - a superior technology will certainly emerge, but cheap alternatives to liquid fuels are currently decades away. Yes, the pessimists have been crying wolf for almost a century. But better that, perhaps, than crying "sheep" when the wolves appear.<br><br>The Hirsch report has no truck with those who believe in the magic of the markets. "High prices do not a priori lead to greater production. Geology is ultimately the limiting factor." There are plenty of oil shales, tar sands and coal seams available for turning into liquid fuels, but it would take years and a massive investment before enough came online. Hirsch compares the projections of the oil optimists to those of the gas optimists in the late 1990s, who promised "growing supply at reasonable prices for the foreseeable future" in the US and Canada. Today the same people are bemoaning the deficit. "The North American natural gas market is set for the longest period of sustained high prices in its history, even adjusting for inflation ... Gas production in the United States (excluding Alaska) now appears to be in permanent decline."<br><br>"The bottom line," Hirsch says, "is that no one knows with certainty when world oil production will reach a peak, but geologists have no doubt that it will happen." Our hopes of a soft landing rest on just two propositions: that the oil producers' figures are correct, and that governments act before they have to. I hope that reassures you.<br><br><br> <p></p><i></i>
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Re: From the Guardian: George Monbiot on Peak Oil

Postby Dreams End » Tue Sep 27, 2005 10:37 am

<!--EZCODE QUOTE START--><blockquote><strong><em>Quote:</em></strong><hr>LONDON (Reuters) - Oil edged lower Tuesday on signs that crude supplies remain plentiful, even with all U.S. Gulf of Mexico oil output locked in after Hurricane Rita.<br><br>Saudi Arabia said there were no takers for OPEC's spare supplies, while the kingdom may pump less crude in October.<br><br>The possible cut in output next month would come even with all 1.5 million barrels per day (bpd) of U.S. crude production in the Gulf of Mexico shut in for a third day Monday.<br><br>At 6:20 a.m. ET, U.S. crude fell 60 cents to $65.22 a barrel, pulling back from early gains as high as $66.17 that came after Monday's 2.5 percent rally. London Brent crude fell 61 cents to $63.32 a barrel. <hr></blockquote><!--EZCODE QUOTE END--><br><br><!--EZCODE AUTOLINK START--><a href=""></a><!--EZCODE AUTOLINK END--><br><br>I dealt with Simmons in the other peak oil thread. I wouldn't turn to an oil investor for info on peak oil since, you know, oil investors make money when oil prices rise. <br><br><br>Also it is NOT necessarily better to cry wolf, as that cry of wolf can be used to manipulate oil prices and also to justify policies such as invading oil producing countries. And when Simmons cries wolf, he does so in a way that PRECLUDES hope of any actions to forestall a collapse. <br><br><!--EZCODE QUOTE START--><blockquote><strong><em>Quote:</em></strong><hr>Matt Simmons hopes he is wrong.<br><br>But if he’s right in his belief that Saudi Arabia’s giant oil fields might already have peaked and could start into rapid decline in as few as three years, somebody better have a “Plan B” ready or there’s no way, he says — absolutely no way — to avoid a world energy cataclysm.<br><br><br><br><hr></blockquote><!--EZCODE QUOTE END--><br><br>He's on record elsewhere as saying we need a new source of energy but he doesn't think there is one out there that will be enough in time.<br><br>As for other dangers to this crying of "wolf" see my thread "ASPO's Plan for population reduction". <!--EZCODE AUTOLINK START--><a href=""></a><!--EZCODE AUTOLINK END--> <p></p><i></i>
Dreams End

Re: From the Guardian: George Monbiot on Peak Oil

Postby manxkat » Tue Sep 27, 2005 11:00 am

Interesting and well-balanced article on the arguments regarding Peak Oil. I especially thought the last paragraph put this issue into proper perspective:<br><br><!--EZCODE QUOTE START--><blockquote><strong><em>Quote:</em></strong><hr>"The bottom line," Hirsch says, "is that no one knows with certainty when world oil production will reach a peak, but geologists have no doubt that it will happen." Our hopes of a soft landing rest on just two propositions: that the oil producers' figures are correct, and that governments act before they have to. I hope that reassures you.<hr></blockquote><!--EZCODE QUOTE END--><br><br>Obviously, our government hasn't been making any serious effort for decades. Jimmy Carter tried to give alternative energy solutions some support, but the "me" generation came along and killed that. Ever since, our policies have been so damn short-sighted and greedy that we're likely to now pay the price: a hard landing.<br><br>Would I rather hope that we have endless supplies of oil? Not really. I don't think this earth can handle that kind of environmental abuse. We're already beyond the point of no return on global warming, according to scientists. Peak Oil, whether real or made up, is coming.<br> <p></p><i></i>
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