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Peak Oil
The Current Oil Shock: No Relief in Sight PDF Print E-mail

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by: Dilip Hiro, TomDispatch.com

    When will it end, this crushing rise in the price of gasoline, now averaging $4.10 a gallon at the pump? The question is uppermost in the minds of American motorists as they plan vacations or simply review their daily journeys. The short answer is simple as well: "Not soon."

    As yet there is no sign of a reversal in oil's upward price thrust, which has more than doubled in a year, cresting recently above $146 a barrel. The current oil shock, the fourth of its kind in the past three-and-a-half decades, and the deadliest so far, shows every sign of continuing for a long, long stretch.

    The previous oil shocks - in 1973-74, 1980, and 1990-91 - stemmed from specific interruptions of energy supplies from the Middle East due, respectively, to an Arab-Israeli war, the Iranian revolution, and Iraq's invasion of Kuwait. Once peace was restored, a post-revolutionary order established, or the invader expelled, vital Middle Eastern energy supplies returned to normal. The fourth oil shock, however, belongs in a different category altogether.

    Nothing Like It Before

    Unlike in the past, the present price spurt has been caused mainly by global demand for energy outstripping available supply. Alarmingly, there is no short-term prospect that supply will match demand. For a commodity like petroleum that underwrites and permeates every aspect of modern life - from fuel to fertilizers, paints to plastics, resins to rubber - "balance" requires a 5% safety factor on the supply side.

    At present, however, spare capacity in the oil industry is less than 2%, down from more than 6% in 2002. As a result, the price of oil responds instantly to negative news of any sort: a threat against Iran by an Israeli cabinet minister, a fire on a Norwegian offshore drilling rig, or an attack on an oil facility by armed rebels in Nigeria.

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G8 Ministers Vow New 'Green' Efforts PDF Print E-mail

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by: The Associated Press

    Aomori, Japan - Faced with record-high oil prices, the world's leading economies and oil consumers have pledged greater investment in energy efficiency and green technologies to control their spiraling thirst for petroleum.

    In a joint statement, energy ministers from the Group of Eight countries - joined by China, India and South Korea - also urged oil producers to boost output, which has stalled at about 85 million barrels a day since 2005, and called for cooperation between buyers and producers.

    But with little prospect for a production surge soon, the focus of Sunday's meeting in Japan was on what wealthy nations should do to rein in consumption, while reducing carbon emissions blamed for global warming.

    "We also have to address too the demand side of the equation," said John Hutton, Britain's business secretary. "We will do that through new measures to improve energy efficiency (and) accelerate our moves to a new, low-carbon form of energy generation."

    The 11 nations account for 65 percent of the world's energy consumption and face record-high oil costs. Prices gained 8 percent Friday to US$138.54 on the New York Mercantile Exchange.

    Energy experts say most producers have little ability to expand output. The exception is Saudi Arabia, which could increase output by about 2 million barrels a day.

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New Fears on Long-Term Global Oil Supplies PDF Print E-mail
Thursday 22 May 2008

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by: Graham Bowley and David Jolly, The International Herald Tribune

Oil and gas prices continue to skyrocket as oil production limits become clear.

 

    Worries that world oil demand will outstrip global supplies intensified on Thursday, sending ripples through the global economy as oil prices leaped above $135, a new record high.

    The price spike occurred overnight, and by Thursday morning oil had fallen back slightly to $132.87, down 30 cents from its close on Wednesday.

    But the leap capped a rally that has seen oil rise nearly $5 a barrel in two days, underscoring the dire implications of the current price run-up for businesses across the globe.

    Ford Motor Company, the American auto manufacturer, said on Thursday it would cut vehicle production for the rest of this year and fall short of reaching profitability in 2009, a long-held company goal. In a statement, a top Ford executive said rising gasoline prices "are having a tremendous impact on our sales, our manufacturing operations and our profitability."

    Meanwhile, Europe's biggest airline, Air France-KLM, warned of a profound reshaping of the world airline industry caused by what it called the "explosion" in the price of oil. And American Airlines said on Wednesday that it would slash flights and begin charging passengers to check bags, part of a company effort to cut costs in the face of skyrocketing fuel prices.

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Peak Oil and Politicians PDF Print E-mail

Read more of Kelpie Wilson's columns

   
    By Kelpie Wilson
    t r u t h o u t | Environment Editor

    Saturday 17 May 2008

    In 1956, M. King Hubbert, a petroleum geologist with Shell Oil, presented a paper to the American Petroleum Institute that predicted US oil production would peak in the early 1970s and then follow a declining curve, now known as Hubbert's curve. But Hubbert almost didn't get to give his paper. He got a call from his bosses at Shell, who asked him to "tone it down." His reply was that there was nothing to tone down. It was just straightforward analysis. He presented the paper, unedited. You can read the whole story here.

    Since that time, the oil industry and its political supporters have done everything they can to tone down the message that oil is a finite resource and that we will run out of it some day. Why would they do that? To further the short-sighted, short-term pursuit of profit. In 2004, Shell finally got caught in a lie about the size of its oil reserves. The company had inflated the stated size of its oil reserves to keep stock share prices high because who wants to invest in a company - or an industry - that is going the way of the dinosaurs?

    Since 1956, the world economy has proceeded under a sort of oil company spell that has woven the illusion all around us that oil depletion is so far into the future that we don't need to worry about it. That belief was essential to support the aim of an endlessly growing economy.

    There have been a few hitches in that strategy. In 1972, just as oil production in the United States reached its all-time peak, a group of computer modelers from MIT released a study called "The Limits to Growth." They predicted a steep decline in natural resources of all kinds. Because reserve numbers for many minerals, including oil, were not accurately known back then, they looked at different scenarios. Some showed us running out of oil before 2000 and some showed the peak occurring toward the middle of the 21st century.

    The pro-growth faction reacted quickly and scathingly to the idea that there could be limits to growth. The MIT scientists were treated like Cassandras in academia and in the press.

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Oil Running Out as Prime Energy Source: World Poll PDF Print E-mail
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    By Deborah Zabarenko
    Reuters

    Monday 21 April 2008

    Washington - Most people believe oil is running out and governments need to find another fuel, but Americans are alone in thinking their leaders are out of touch with reality on this issue, an international poll said on Sunday.

    On average, 70 percent of respondents in 15 countries and the Palestinian territories said they thought oil supplies had peaked. Only 22 percent of the nearly 15,000 respondents in nations ranging from China to Mexico believed enough new oil would be found to keep it a primary fuel source.

    "What's most striking is there's such a widespread consensus around the world that oil is running out and governments need to make a real effort to find new sources of energy," said Steven Kull, director of WorldPublicOpinion.org, a global research organization that conducted the poll.

    Concerns over climate change, which is spurred by emissions from fossil fuels including oil, also were a factor among respondents, Kull said.

    The current tightening of the oil market is not temporary but will continue and the price of oil will rise substantially, most respondents said.

    "They think it's just going to keep going higher and a fundamental adaptation is necessary," Kull said in a telephone interview.

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Experts: Oil Is a Slippery Situation PDF Print E-mail
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    By John Colson
    Post Independent

    Saturday 29 March 2008

Clock ticking on the world's supply.

    Aspen - Experts might disagree about exactly when the world will run out of the oil that is easily found and extracted, but most agree that it will happen at some point and that humanity should be preparing for that day.

    That was one of the messages to come out of the second full day of The Aspen Institute and National Geographic Magazine Aspen Environment Forum, at a panel discussion featuring energy-efficiency guru Amory Lovins, green technology specialist Randy Udall, and Marvin Odum, executive vice-president of Shell Oil. The forum concludes today.

    The three took part in a wide-ranging discussion that centered around the concept that "peak oil" is approaching rapidly, moderated by Jack Riggs of The Aspen Institute.

    What is peak oil?

    Udall, former head of the Community Office for Resource Efficiency in Aspen and Carbondale, noted that the world is cranking out about 80 million tons of carbon dioxide every 24 hours, a statistic that has focused the world's attention on global warming from greenhouse gases such as carbon dioxide.

    "We're focused on the smoke," Udall said of the issue. "Let's think about the fire."

    He said that in order to produce that much carbon dioxide, the world must be burning approximately 30 million tons of oil, coal and natural gas per day, which he said translates into roughly 140 pounds per week, per person, globally.

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