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TechnoratiGreenpeace Study Finds Oil Companies May Be Doomed
Environmental activist network argues that the oil industry might be approaching a tipping point from fall in the price, advances in technology and policies on climate change
A long-term decline in the demand for oil could undermine the huge investments in Canadian tar sands, which have been heavily opposed by environmentalists, according to a report published today.
![[In this May 29, 2009 file photo, an oil rig is seen at sunset in the desert oil field of Sakhir, Bahrain. (AP Photo/Hasan Jamali, file)]](http://www.commondreams.org/files/article_images/oil_greenpeace.jpg "oil_greenpeace.jpg")
The report, by Greenpeace,
will make uncomfortable reading for the companies that are investing
tens of billions of pounds to exploit the hard-to-extract oil in the
belief that demand and the price would climb inexorably as countries
such as China and India industrialise.
Citing projections from the oil producers' cartel Opec and the International Energy Agency, as well as various oil experts, the report casts doubt on the conventional assumption that consumption and prices will begin gathering pace once the world pulls itself out of recession.
It argues that alongside the cyclical fall in the oil price there are more fundamental structural changes taking place. These are driven by advances in energy efficiency and alternative energy, cleaner vehicles, government policies on climate change and concerns over energy security. Greenpeace has posted the report to 200 shareholders in Shell and BP, including pension funds, in an effort to put pressure on the companies to think again. BP reports quarterly results tomorrow and Shell on Thursday.
Lorne Stockman, the author of the report, said: "A peak in oil demand was barely discussed even a year ago, but now it is a viable idea. When it happens, I wouldn't want to guess, but it will happen sooner than we thought. There has been lots of talk about a supply peak, but it is good to start talking about a demand peak, and that has huge implications for these companies.
"All of the international oil companies as you look beyond 2020 need a high oil price to be profitable, because they are increasingly being pushed to develop expensive resources in not just the tar sands, but in deep water and offshore Arctic sites.
"But there is something more structural going on," he added. "Governments are beginning to act, and not just the Obama administration. In the EU, the policy driver is climate change, and in China and the US, it is about energy security and the vulnerability of the economy to volatility in the oil price."
The rush to exploit the tar sands in Canada has been described as a modern day gold rush that has led to a huge boom in once sleepy towns in the province of Alberta. The oil was once considered too difficult and expensive to extract as it is a mixture of clay, water and bitumen.
Many of the projects have been mothballed until the oil price recovers. It has fallen from a peak of $147 a barrel and is currently at about $68. Merrill Lynch estimates that the price would need to settle at about $80 to make further investment viable. Critics argue that tar sands extraction is disastrous to the environment, causing deforestation, requiring huge amounts of water and greenhouse emissions three to five times greater than conventional crude.
The report notes that Opec and the IEA have been revising projections for oil demand downwards since 2006, with by far the sharpest revision this year. Opec has revised its 2025 oil forecast down by 12% within the past four years.
Peter Hughes, who spent much of his career at BP and BG, and is now director for global energy at consultancy firm Arthur D Little, recently wrote a report titled 'The Beginning of the End for Oil?' He supports the Greenpeace view and said the correlation between oil demand and GDP growth has been weakened. "It is widely accepted that demand in OECD countries has plateaued and is going into decline but it has also been thought that would be massively outweighed by growth in China. But the Chinese think long-term and identified some time ago that the biggest threat to their economic growth was an increasing dependency on imported energy, which is anathema to them. The conclusion is clear - to reduce the reliance on hydrocarbons through energy efficiency and fundamental technology change. I think we will reach peak oil demand in the middle of the next decade."
About 50% of oil demand in the US fuels cars and the report takes hope from the Obama administration having tied recent bailouts for the industry to the development of cleaner vehicles. But it notes the US is far behind China, where government mandates mean new Chinese cars are 56% more fuel-efficient than those built in Detroit. Fuel-efficient cars in China attract 1% sales tax and sports utility vehicles, 40%.
Greenpeace also contends that a high oil price is simply unsustainable. It cites research from Cambridge Energy Research Associates, which suggests that economies become constrained when the price moves into a band between $100 and $120 a barrel, causing the price to fall back. Another report from energy business analysts Douglas Westwood puts the "recession threshold" even lower, at $80 a barrel.
Shell, which has delayed a number of tar sands projects, argues that energy supply will struggle to keep up with the demands of a growing global population and that in the long term there will be upward pressures on energy prices that justify investing in the Canadian tar sands. "Our first oil sands operation, the Athabasca Oil Sands Project (60% Shell share) was built between 1999 and 2003, when the oil price was considerably lower," a spokeswoman said. Shell has the highest exposure of the majors to the tar sands and is most at risk from a decline in demand.
There are contrary views. The Saudi oil minister warned in May that the world could be facing another oil shock, with prices above $150 within two to three years through a lack of investment in new capacity. The International Monetary Fund has expressed similar concerns. Even Greenpeace does not suggest that there will not be temporary squeezes on demand and price spikes. But it believes that the world might fast be approaching a tipping pointthat could have profound implications.
66 Comments so far
Show AllWhew! now i get to add my 1/52 to the conversation.
But what an improvement! i can remember, Jennifer, when EVERYone laughed at the Peak Oil concept. Glad to have your logic aboard.
Of course we shall run out...we keep on burning oil and nature quit making it a ZILLION years ago.
The second half of all oil ever extant on Earth is what we are talking about. It's bound to be farther away, harder to find, more expensive to pump (the days of gushers are long gone), and a filthier, dirtier, more sulphuric sludge than ever before. Where we draw the line on using it all up may our choice, or it might be decided by the market...in time to save the planet! Or not.
Already, this discussion shows intelligence is rising. finally. everyone speaking herein is right in a way. there are so many solutions it seems so stupid to equivocate about which is better. Many US cities already have laws in place for all-hybrid taxi fleets, e.g. When people see those taxis putting around all the time they will get used to change faster. Hybrid buses are also a fact. tax policies of various nations on SUV-subsidies are being re-considered. and marketable plug-in vehicles are only months away:
IMAGINE A SMALL VERTICAL SPINNER WIND TURBINE WHIRLING ON YOUR ROOF...your car charging every night for free! there are dozens of these verticals invented, which whirl with wind from any direction. solar rooftops can create a credit all day with your local power company. (if they ever allow the meter to run backwards in some locations...like AZ for cryeye!)
AND farmers have to get away from bio-fuel from corn, which makes the soil disappear and uses almost as much power to grow as it produces. Instead, growing quality crops suitable to their environment and then borrowing (from the Gov't if necessary) to put up some of those huge wind turbines on yur own land. Saves the farms for families...diversifies both crops and power sources.
Solutions so simple are out there: just look at the articles in this current email from commondreams to see the range of discussion.
As with starvation from famine, almost every time government is the problem...and that is because government is ALWAYS controlled by big business. It’s one dollar=one vote.
The amoral pursuit of profits is more than avarice--it is tantamount to murder on a massive scale. Over one billion people go hungry and desperate under this system. The ocean is being murdered from the bottom up. Species are being systematically massacred. There is no word for phylogicide. Big Biz, i.e., Capitalism, would destroy the planet and everything on it to make buck...and then find another planet to do it again.
What we need is a tax policy, and laws, that will encourage small businesses, NGOs, and local free enterprizers, who admittedly will inevitably grow into Big Biz and then need to be reduced in their turn. But right now, at this crisis stage of human evolution, we need to amend, not tear down, the system. We can imagine heaven, but we still can't imagine it down here on Earth where we can use it.
How about just plain seeking profit? I don't see anything wrong with that. As a matter of fact, it's what makes the world go round.
Climate change, in whatever form it may take, has a high probability of decreasing global commerce to a trickle.
Nations and people who are serious about viability through this unavoidable planetary phenomena will make appropriate choices.
It is an amazing opportunity to do the right thing.
Why would climate change change global commerce to a trickle? It would seem that sea-borne commerce will do fine as the ocean levels go up, there's more water to sail on.
Because it probably won't happen gradually, or without accompanying weather events, rogue waves, flooded port facilities, calamatous human conditions around shore lines, If it turns the way of iceage, the water that was rising will be taken from the seas and moved to the poles. For documentation of rapid extinction events, etc, read "Under a Green Sky". Check out the references to earthquakes and hail, etc in Rev of St John. I think the religiousness of that material is so much nonsense, but I conjecture that it contains a bit of cultural memory.
Towns in northern Alberta are booming...and while the Athabasca River is being totally poisoned, First Nations people are starting to pay the price with their health. Once this deadly boom is over, are the US oil companies and the Alberta government going to pay for a gigantic clean-up that will be required? Can a poisoned river ever be cleaned-up again?
when david slew goliath someone said "it couldn't have happened to a nicer guy"
Human beings are nothing if not endlessly delusional. Partially exempt are the ruling kleptocracy.
Everything around us is due to cheap oil. The future is nothing more than a continous decline in the quality of human life--though the very rich may maintain private armies or use "public" armies to maintain prosperity for their minutre fraction of human kind.
A massive die off of humans is guaranteed within 100 years.
Betting much greater than 80%.
But then, everyone reading this will be dead long before.
Sleep well? RIP?
Let's hope they are right...and before it's too late. Those sand tar pits are bad business indeed.
http://www.avaaz.org:80/en/tell_clinton_no_pipeline/?cl=280474323&v=3696
AVAZZ has mounted an email campaign to Secretary Clinton requesting she say NO to the tar sands pipeline from Canada to the US.
Hillary Clinton is Secretary of State, she lacks the ability to stop a pipeline between Canada and the USA. Furthermore, it would be a violation of NAFTA.
Say no to oil sands oil? That would be a tragic and strategic mistake for the U.S. and it won't happen. Canada is the number one foreign supplier of oil and distillates to the U.S. but, like the States, Canada's conventional production and conventional reserves are in decline. Oil sands oil is also a heck of a lot less expensive to buy due to it being heavy/sour crude (bitumen, actually). It is also more expensive to refine this syuff though. Unless changes are made in how this stuff is collected and processed it is an ecological problem as well as energy intensive, having an EROEI of about 1.5 barrels equivalent to 1 - and this is at a current production rate of around 1.2 mbpd. We need to find and/or create the technology to make this process more productive as well as cleaner. The goal is to increase production of oil sands oil to somewhere around 4 to 5 mbpd although this is a long way off.
For all the rhetoric you hear and read, the U.S. will not be saying no to this product anytime soon.
Oil will continue to be needed for the chemical and pharmaceutical industries.
We're going to need the oil that's left to build green energy machines.
Greenpeace is too conservative in their estimates.
From where I sit, the market is going to eat the Exxon/Mobil tiger alive like a swarm of mosquitoes. Couldn't happen too soon.
The price of renewable fuel will plummet. Wildcatter farmers all over the world will take over any arid land with half a drop of water, and will grow fuel for profit.
Even now, some cars don't need gasoline. The hybrid is now morphing into the extra-battery rechargable hybrid, under consumer pressure. Face it, who wants to spend expensive fuel and time driving to a gas station, wait for a pump, and get stinky gasoline semipermanently onto your shirt sleeve?
The fully electric car isn't far behind. I know people who own an electric vehicle that somehow survived Detroit's great electric car-crushing in the 1990s, and they love their old electric. Electricity is the equivalent of $.75/gallon now for electrics. Nonpeak electric costs may well plummet, and relatively painless ways will be found to handle peakload air conditioning demand versus supply.
Beyond the car is far better transit, electric of course.
We really need a carbon tax with vampire fangs, the sort of tax we would wish on the cigarette industry.
So, I hope Exxon went as a mourner to GM's funeral. Ashes to ashes, dust to dust, reminds you of your own mortality.
And where will you get all that electricity?
As long as the western world continues with their single-occupancy-vehicle paradigm and China and India promote their inexpensive "Tatas", Big Oil has nothing to worry about.
The only thing they really have to fear is the 3-wheeled (7-9 passenger) minibus, Model CWN (Chevron's Worst Nightmare)
See http://greeneconomypost.com article entitled "Driving to Destruction...
Unfortunately, politicians are still controlled by "Big Oil" and laws which revise the "taxi laws" and enable the transition to the Model CWNs are unlikely to be forthcoming.
The most critical concern which determines the overall health and longevity of an oil company is the size of it's bathtub (oil reserves - owned and/or controlled). There is nothing and I mean nothing more important than this. Reserves are the main reason for all of the mergers, aquisitions etc. which have taken place over the years. When one realises 66% of all conventional oil reserves are located in 5 countries in the Middle and Near East the problem is clearly seen. To be blunt, conventional oil production in the non OPEC world is in permanent decline and the only nation with any meaningful "swing" production is Saudi Arabia.
Oil is so incredibly important for our way of life and, indeed, our very existence - most folks are totally unaware of the penetration of oil and products derived from oil into our daily lives. Without oil we can kiss life as we know it good-bye.
Although I wish I was wrong, at this point in time, and for the forseeable future, there is nothing which can take the place of oil.
"Oil is so incredibly important for our way of life and, indeed, our very existence - most folks are totally unaware of the penetration of oil and products derived from oil into our daily lives. Without oil we can kiss life as we know it good-bye. Although I wish I was wrong, at this point in time, and for the forseeable future, there is nothing which can take the place of oil."
Yes, oil goes into all the clothing we wear, the food we eat, the our daily products that we use but hempseed oil can replace crude oil in most cases and then for exceptions such as nylon, producing the chemical equivilent of light sweet crude oil from wild algae can help. We won't die without crude oil. On the contrary, our cornfed overprocessed junk foods will give way to more people eating healthy for a change.
Jennifer, as I said in my post I wish there was something which could replace 20 million barrels/day oil equivalent (U.S. consumption) but there isn't. A combination of what you suggest wouldn't make a pin prick in our oil consumption. Hemp went from the banned susbtance list in WW II and products produced from hemp supplied many different items but not in the quantities to be considered strong. At the conclusion of the war hemp went back on the "bad" list.
If crude oil was unavailable starting tomorrow, the die-off would begin in days. A great many of us will die without crude oil - rather quickly.
"I wish there was something which could replace 20 million barrels/day oil equivalent (U.S. consumption) but there isn't."
True enough. There isn't. But most of the 20 million barrels/day we consume is consumed wastefully and we'd be better off without it. Travelling by automobile or passenger airliner is a frivolous waste of energy and should be replaced by fuel-efficient mass transit running on alternate sources of energy. Those who live so far from where they need to go on a regular basis that his would not be possible should not expect a continuation of the taxpayer-subsidized, cheap fuel they currently enjoy and should move. Plastics and most other chemical products can either be done without or produced from plant-based sources.
"If crude oil was unavailable starting tomorrow, the die-off would begin in days"
Also true (well, maybe not as soon as you imply but soon). But if crude oil was completely phased out over the next 5 - 10 years we'd be less obese and in most other ways much better off.
When you think about it, it is amazing, isn't it. Fully 70% of our oil consumption is to produce transportation fuels (gasoline, diesel, aviation, marine etc.). If anyone here is old enough they might remember a time (before and at the beginning of the age of suburbia) when most cities had some form of electric trolley systems on rails running. Then came the electric trolley buses, anyone remember these? When these companies were "bought up" by big auto and their buddies, we witnessed the appearance of diesel buses. Then, as cars became more affordable, these city public transportation systems were wound up and left to die or to just morph into basic service transportation.
When the age of suburbia kicked off in the 50's these huge areas had no public transportation at all - the age of the personal vehicle(s) was truly born. Add to this the vast amounts of money poured into a national highway system to provide the car companies with a wonderful marketing tool to sell their cars and the oil companies to provide the fuel. At the same time virtually $0.00 was being spent on affordable mass transit. Even today, public transportation options in cities which used to be suburbs is spotty at best and non exsistent at worst. We have allowed this to happen and it is the number one reason (other than geography) of why our oil consumption per capita is at least double to triple that of Europe.
We will pay a heavy price for our ignorance and shortsightedness.....sooner than we think.
"If crude oil was unavailable starting tomorrow, the die-off would begin in days. A great many of us will die without crude oil - rather quickly."
Nonsense.
q
Nonsense? Really? No oil = no gasoline, diesel or aviation fuel. Some countries have stocks of these items. For example the U.S. has about 23 days of oil and about the same number of days worth of gasoline in inventory (not counting the crude stored in the SOR, which would NOT be tapped). How do you propose to maintain food production and the distribution of food to the cities? The average item you purchase in a grocery store in the U.S. travels 1500 miles - no fuel = no food. Think about how oil dominates our lives, it is truly the miracle liquid which has allowed our civilization and world population to get to where it is today. There is a host of other calamities which would immediately impact on our society if oil suddenly disappeared. Granted, oil will not be "unavailable" in one day, I was just illustrating how utterly dependent on oil we are and 99% of us have no idea of this dependence and how oil touches every aspect of our lives. The world would be nothing like it is today without oil.
I agree, our society would collapse and billions would starve to death. The "nonsense" answer tells me there are many "anti-oil" types who took up tree-hugging without understanding the basics about our economy and civilization.
Because I respect those who have different opinions, I'm willing to listen to those who advocate reducing our oil consumption at a faster rate (it's going to happen anyway, so it's just a question of how fast we get off our dependence). However, it's hard to have an intelligent debate with individuals who lack the foggiest idea about how things work.
I've spent the last several years reading up on peak oil. I find it's ramifications simply terrifying. So far nothing really meaningful is being done to address it. Just denial, like with so many of the other big issues we are facing.
My emotional side simple hopes it doesn't hit until I no longer walk the face of this earth. But my rational side thinks that probably wont be the case.
I've worked in the oil industry for a looong time, and I believe I have a fairly good grasp of the peak oil issue. Given the complexity of the data, and the amount of information we lack at this time, my comments have to be taken with caution:
Summarizing, it's likely peak oil has been reached for light crudes excluding condensates, which may continue to increase as natural gas reserves in remote areas are developed. However, it's doubtful we've reached peak oil overall, and of course extra heavy crude reserves such as Canada's and Venezuela's have a lot of growth potential. The snags would be environmental (Canada) and political (Venezuela).
I got a queasy feeling Middle East reserves aren't as high as touted by those nations, but I don't have a quality data set to make a firm call. Iraq's potential seems to be touted a tad high, and there's no accounting for the huge damage inflicted on the fields by the US administration of same since 2003 (they did some unspeakable things to do those fields from 2003 to 2006).
Additional oil supplies can be made available, and of course replacement fuels will continue to be developed as oil prices go up in real terms. So I don't think we'll see a crisis such as predicted by some, it'll just be a gradual squeeze as prices go up and replacement fuels are developed, and/or consumption is reduced. We do have to remember the USA in particular has a very inefficient vehicle fleet, and fuel use can be cut by at least 20 % (more than Kuwait's total production) just by moving to hybrids and smaller cars.
fdoleza,
I don't think the unspeakable part of the US invasion and occupation of Iraq was what they did to the oil fields.
Maybe you've been working in the oil industry tooo long.
I agree with you on Middle East oil rserves. I also do not have hard data behind the claims but I do know that in the 80's when oil was gushing, with the North Sea, North Slope, Gulf of Mexico, Cantarell and others either coming on line or hitting their prime as well as what was available in the Middle East and combined with conservation efforts in the West (after the two oil shocks in the 70's) - oil prices crashed. OPEC decided on a production quota system based on reserves. Well, all of a sudden, Middle East nations' proven oil reserves doubled overnight - this worries me somewhat.
Fdoleza, you are closer to oil than most of us, I am simply a very interested layperson but I have looked into oil enough to be seriously concerned. Particularly so that I have come to the conlusion, as things stand right now, there is nothing available now or in the near future which can replace oil. Don't get me wrong, I truly wish our best and brightest minds come up with something. Right now we are chipping away at the edge.
I agree with you on Iraq, even with their dilapidated equipment and technology starved oil facilities, they were pumping out more oil before the 2003 invasion and the U.S. bought about almost third of it - daily. I think there is only one large oil producing country the U.S. will not accept deliveries from - Iran, since 1979.
Interesting times are ahead....
I am happy to not have hear all the crap about Peak Oil anymore.
unfortunately it's merely being replaced with crap about hydrogen and the supposed global warming hoax. as long as we live in a civilization dependent on splitting and projection there will always be crap. in other words as long as we live in a civilization there will be crap. and i fear you ain't even begun to hear about peak oil yet.
The energy saving, DIY, U-Tube, "hydrogen from water" craze must finally be picking up speed.
Hydrogen from water doesn't save energy. What's DIY?
"Hydrogen from water doesn't save energy."
The above statement is patently false. Using a hydrolyzer with a 20% concentration of potassium hydroxide (which is not consumed in the hydrolysis action) produces more hydrogen output than the enrgy needed to continue the electrolysis of the liquid. The myth that hydrogen based energy cannot be produced as efficiently as oil is absurd. Oil is pumped from the ground, processed into fuel and burned. HHO gas is simply converted from liquid water into gaseous HHO. Seeing as you do not have to produce the water first, the statement that you cannot get more energy out of hydrolysis than you put in is a falsehood perpetrated by the energy industry. There are many people that have successfully used this method to run ICEs, gas turbines, and home furnaces. Also the trucking industry has been looking quite extensively into HHO boosters to decrease fuel consumption. Hydrogen fuel is a viable alternative. I have personally seen and run a 100 plate hydrolyzer and can attest that the amount of hydrogen produced was sufficent to run a 6kW genset the amount of power needed to convert that much water to HHO was 2.3 kW. The reason this isn't discussed is that anyone could run thier own hydrolyzer in thier home and produce enough hydrogen for all their energy needs. If I were selling petroleum products, I would tell you hydrogen didn't work to protect my profits.
"What's DIY?"
Do It Yourself. DIY is the only way once corporations meet their doom, as desired by many. In the current example you will be forced to figure out how to provide for your energy needs in a world without energy corporations.
Corporations' doom should not mean DIY nor the buffalo-dung scenarios as described below. Far from it. Likewise, the very real deaths should hydrocarbon use stop abruptly does not mean ultimate dependence on hydrocarbon economies. Quite the opposite.
We need to replace corporations, but by more equitable forms closer to syndicates and cooperatives.
We need to wean from oil not one fine day, but quite thoroughly, before the tank runs dry.
Starting early would be wonderful, except that we didn't.
I have to say I find Greenpeace optimistic, however. In the States, at least, attempts to burn less appear nominal at best.
Interesting concept. Sort of like cavemen of the 22nd century burning trees and buffalo dung? That's not going to make people very happy.
Oil is uniquely suited to some of the purposes we apply it to. You will not run a freight train on dung, let alone a jet fighter.
Actually you could probably fuel a freight train on dung, if you went back to steam locomotives. 1KG of dung contains roughly 15MJ of energy while 1KG of coal contains roughly 30 MJ of energy. Although dung contains roughly half the energy of coal, there is an almost an endless supply of it in our nations capital.
D.C. could become the hub of a national train service. The B.S. it generates would simply need to be dried then burned in the trains boiler to send it on its merry way. You could potentially create an almost perpetual motion machine by simply carrying a few congressmen on the train to self generate the B.S. as the train traveled around the country. Note that Republicans and Blue Cross, I mean Blue Dog democrats are much more efficient at generating the needed B.S. so you need to carry fewer of them to fuel the trains.
Now I agree with you that jet fighters probably could not be powered by dung, but that would not stop congress from funding a multimillion dollar study of its feasibility anyway. This would generate the most expensive type of B.S. which is the Military Industrial type. Although very expensive and so very inefficient I supposed it too could be dried and used to power the trains.
"Actually you could probably fuel a freight train on dung, if you went back to steam locomotives."
They are much less mechanically efficient than internal combustion engines.
"1KG of dung contains roughly 15MJ of energy while 1KG of coal contains roughly 30 MJ of energy."
I'll take your figures as fact, but the energy is on different "order" regarding volume, non combustables, etc. The concentration of energy in a small space as with fuel derived from crude oil, as well as it's ability to be automatically pumped and mixed with oxygen in a regulated way could never be done with done.
"there is an almost an endless supply of it in our nations capital."
Nyuck nyuck nyuck. :-)
Hey, go dung!
The sooner the Oil industry enters the dustbin of history along with the slave trade, the better. That industry has been one of the more damaging and pernicious in the experience of mankind.
The oil industry won't enter the dustbin of history. It'll just evolve to sell you bio-diesel and wind-generated power. I don't see why you think it has been "damaging" - what do you propose, that we burn trees for fuel?
"'I don't see why you think it has been 'damaging' . . . ."
Hmmm. Let's see. Massive atmospheric and oceanic pollution. Disastrous economic dislocations. Wars fought over resources and enabled by those resources. Depredations of a selfish and sociopathic monied class.
You must have a very unique definition of the word "damage."
q
quickstepper - thanks for your reply. I don't believe I could have better stated it myself.
The oil/energy companies are and have been major players in government decision making for many years. Without sufficient energy supplies nations will fall flat on their faces. They don't have worry about losing money. If prices aren't where they want them to be, they will simply stop producing and create a shortage. The shortage in turn will increase the cost.
Furthermore, if and when global governments get serious about alternatives, you can bet the oil companies will have already invested mega-bucks in those alternatives.
On the other hand, if you bought oil stocks at $147 per barrel, it will probably take many years before you see a profit.
There's no such thing as a global government. And of course oil companies are already investing megabucks in alternatives. They seek to profit from selling stuff people want to buy, and alternatives seem to be a viable investment vehicle.
And when the oil runs out, hemp and algae will arise, public transportation will be brought to life and improved, and we can finally stop aching our butts and brains in high volume traffic and get more companies to switch to working remotely. Until then, we're stuck in guzzler hell !
It's doubtful oil will run out. Evidently the oil fields being produced today are depleting, therefore it's necessary to replace them as they age. The "new oil" which has to be developed to replace producing fields can include Canadian and Venezuelan extra heavy oil reserves, or can come from other sources, such as newly discovered oil fields, enhanced recovery in existing fields, biofuels, etc.
There are of course "new oil" resources in Saudia Arabia, Iraq, and similar locations. However, I don't think they'll be sufficient to offset the increasing demand as China, India, and other nations moving away from central-control economies to a more flexible system continue to develop. This means the upward pressure on prices will continue.
An interesting point is that extra heavy oil resources in countries such as Canada and Venezuela are under government control, but government policies are quite diverse. Canada's Alberta Provincial government has been more interested in the economic activity brought by oil developments themselves, while Venezuela has been more focused on government control and high taxes derived from the oil. As a result, Canada's fields produce a lot more than Venezuela's, even though Venezuela's extra heavy oil fields are much more prolific. Venezuela seems to face two options: either they lower taxes and try to work with foreign companies, or do it on their own. But they lack the ability to do it on their own at this time. Therefore either they let production go down, reducing their national income and GDP, or create better conditions for foreign participation in their oil field projects.
Because oil prices are likely to move up gradually, I suspect the biofuels industry will evolve to be more competitive - this will be true in particular for biofuels not derived from corn. As a matter of fact, I'm starting to wonder if the fuel cycle could not be more efficient if the biomass were to be mixed with coal and fed directly to giant gasifiers, with the resulting CO2 injected into deep aquifers for sequestration (the gasifiers would generate electricity and also hydrogen and/or synfuels). Evidently this solution makes a lot more sense than using our tax dollars to buy F22s, invade Iraq, or send people to Mars.
"with the resulting CO2 injected into deep aquifers for sequestration"
You bet. Inject an unlimited amount of CO2 into deep aquifers for an unlimited amount of time and keep it there forever. Nothing could go wrong with that.
http://en.wikipedia.org/wiki/Lake_Nyos
It's not unlimited, and deep aquifers means deep (meaning 5000+ feet underground), not a lake bottom. Evidently we're going to have to develop a better way to gather solar power, and it's likely humanity will have to shrink its footprint (meaning it'll have to reduce its population).
Neither of your last 2 statements is true.
1. We have many perfectly good ways to not only gather but use solar energy: photosynthesis followed by the many uses of plants--as food, fiber, soil miners, soil stabilizers and restorers, carbon sequesterers, etc etc; photosynthesis followed by animals eating the plant followed by the many advantageous functions of animals--as food, as producers of non-directly lethal food and fiber; as links in ecosystems that directly or indirectly keep us alive; as transport and work animals... We also have both passive and active solar heating and cooling; water heating; photovoltaics; and the use of wind in many ways, which after all is also a form of solar energy; and etc. No further advances are necessary, although improvements are inevitable and always welcome.
And 2. although through bungling it's likely we WILL reduce our population, nothing inherent in the situation demands anything but a slow natural reduction in population, provided we shrink our footprint in other ways--conservation, solar, wind, and changes in our HUGELY wasteful way of life. Our NOT doing that would be the bungling part of it.
The rising oil demand due to Uncle Sam rewarding guzzlers while persecuting sippers is no doubt here to stay but we will have to reduce our demand for oil by switching to public transportation especially light rail, improving our car engines' mileage or altogether getting rid of the combustion engine, stop laughing at people who choose to ride their bikes to work and actually build roads and tunnels for bikers, stop subsidizing King Corn and give small farmers their economic lives back so that they can get back to producing healthier produce which will reduce guzzling fossil fuels and water, and last but not least switching from crude oil to hempseed oil and algal oil.
Sorry, but that's an American-centric view of the planet. Rising oil demand IN THE USA is partly due to the lack of a carbon tax and/or fuel tax that really deters fuel consumption. Rising consumption OUTSIDE the USA is mostly caused by fast economic growth in China, India, and other "tiger nations". Try not to focus on American issues as if they were the only ones driving things, because you're bound to a) reach the wrong conclusions and b) sound like a person who thinks the universe revolves around Washington - which of course you know is not true, because it revolves around Jesus' head as he sits in heaven to the right of his Father.
Otherwise, I agree with most of what you say, other than the "give small farmers their economic lives back". That, my friend, is baloney.
There is no reason to believe that developing nations wouldn't follow suit if we made a really serious effort to reduce our consumption. As it is our per capita consumption is so much higher than theirs that to suggest they limit their consumption is laughable -- or at least I'd laugh if I were them.
huh?
Are you deaf? Would it help if I used all caps?
"the "give small farmers their economic lives back". That, my friend, is baloney. Small farmers can get their economic lives back or perish like the rest of us, and they don't deserve special consideration any more than a dishwasher or an elevator repairman."
That definitely is NOT baloney ! Big Agri has been subsidized by the government and allowed to persecute small farmers "legally" without penalty. Do a google search on "corn fed" and "grass fed" and you'll see where the connection to fossil fuel guzzling lies at. And to give you another hint, corn-fed milk relies on anti-biotics and petroleum manufactured corn feed while grass fed milk doesn't. I'll see what I can do to help you some more on this one.
Jennifer, I believe the agricultural sector benefits from subsidies across the board. I'm aware of the heavy subsidies driving the corn business in the USA, and who pays the lobbyists. However, I haven't seen a good argument regarding small farmers. In today's modern society, size does have an advantage up to a certain point (having worked in a very large company, I believe there's an optimum size, and super big doesn't necessarily mean more efficient).
This article reveals how in certain instances a Party/State dictatorship functions better than a Corporate/State dictatorship.
democracy? who needs it?
Who has it?
Good question... :)
I had the same thought. Dictatorships with capitalistic economies always start out well, even better than many Democracies, but every single one has collapsed for the same reasons. The more central control, the more inefficient till you have strangled the economy.
I had exactly the same thought as I was reading this article.
The Chinese are always ahead of the game, for their control of societal, economic and techno-scientific issues and policies are less tied to the self-interests of a narrow class of profiteers who often act in disorderly fashion, wastefully, and criminally, and who must give their predatory activities a democratic and legalistic veneer through lies, deception, manipulation, and propaganda. The Chinese make no bones about the fact that their mode of governance is a dictatorhip.
The Chinese government seems to have the interest of two elites in particular: 1- Communist Party members who hold political power, and their children. 2- A fairly large group of capitalist roader profiteers who have embraced capitalism with zeal, and who own the main economic growth vehicles in today's China. They are predatory capitalists the likes of which the world hasn't seen since before Rockefeller - but also drive China's economy into hyperdrive (China's 9-10 % GDP growth per year is outstanding).
I believe the evolving Chinese system is inestable (this is self-evident because they are moving gradually from a communist central command economy to a capitalist system), their current path leads to serious regional and class inequalities - it is going to hit a brick wall because it's increasingly corrupt and lawless unless they make some corrections in the near term.
THus if they're smart the Chinese will invest heavily in a world class judiciary, and a very competent FBI-like force to root out corruption, punish the guilty, and resolve legal issues amongst the growing capitalist entities, as well as redress popular grievances, in a fast and efficient manner. This also means they'd better improve their laws, and acknowledge once and for all that private property exists, it's there to stay, and it needs to be protected.