More politics of peak oil

One can be forgiven for not understanding the state of our world today in terms of oil and its availability. A new article in Forbes assures us that peak oil is off, that the world is awash in oil. Meanwhile, an article from the current issue of The Economist claims the opposite: that oil supply is insufficient to keep up with demand. Meanwhile, the president is blaming high prices on those nasty speculators. So which of these competing claims is a person to believe? For the uninitiated, peak oil is the point in time when maximum extraction of the world's oil endowment is reached. Since oil is a finite resource, we can exploit it in increasing amounts until we can't any longer, and flows begin to decline.

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America’s denial about the lack of easy oil

At Common Dreams, Michael Klare advises us that easy (i.e., cheap oil) tends to run in concert with prosperity, but that Americans are stunningly obtuse about the fact that we're running out of easy oil:

If American power is in decline, so is the relative status of oil in the global energy equation. In the 2000 edition of its International Energy Outlook, the Energy Information Administration (EIA) of the U.S. Department of Energy confidently foresaw ever-expanding oil production in Africa, Alaska, the Persian Gulf area, and the Gulf of Mexico, among other areas. It predicted, in fact, that world oil output would reach 97 million barrels per day in 2010 and a staggering 115 million barrels in 2020. EIA number-crunchers concluded as well that oil would long retain its position as the world’s leading source of energy. Its 38% share of the global energy supply, they said, would remain unchanged. What a difference a decade makes. By 2010, a new understanding about the natural limits of oil production had sunk in at the EIA and its experts were predicting a disappointingly modest petroleum future. In that year, world oil output had reached just 82 million barrels per day, a stunning 15 million less than expected.
What's the solution?
[T]he United States needs to move quickly to reduce its reliance on oil and increase the availability of other energy sources, especially renewable ones that pose no threat to the environment. This is not merely a matter of reducing our reliance on imported oil, as some have suggested. As long as oil remains our preeminent source of energy, we will be painfully vulnerable to the vicissitudes of the global oil market, wherever problems may arise. Only by embracing forms of energy immune to international disruption and capable of promoting investment at home can the foundations be laid for future economic progress. Of course, this is easy enough to write, but with Washington in the grip of near-total political paralysis, it appears that continuing American decline, possibly of a precipitous sort, could be in the cards.
For a lot more on this problem of peak oil, check out some of Brynn Jacobs' writings at this website, including this article.

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Devastating Wikileaks leaked cables: Saudi Arabia has peaked

Wikileaks continues to drop bombshells, even as Julian Assange finds himself on trial.  Unfortunately, the news about Assange is overshadowing some of the latest, and most devastating, leaks.  Namely, that Saudi Arabia has probably been overstating their reserves-- no big surprise to those of us who have been studying peak oil.   But where we only had speculation and circumstantial evidence before, now we have confirmation in the form of statements from credible Saudi Arabian authorities. The first cable deals with a meeting with Dr. Sadad al-Husseini, former Executive Vice President for Exploration and Production at the state-owned Saudi Aramco.  It's almost comical as al-Husseini goes to great lengths to insist that the theory of Peak Oil is wrong, even as he describes it occurring within the kingdom.  For example, the cable says:

He stated that the IEA's expectation that Saudi Arabia and the Middle East will lead the market in reaching global output levels of over 100 million barrels/day is unrealistic, and it is incumbent upon political leaders to begin understanding and preparing for this "inconvenient truth." Al-Husseini was clear to add that he does not view himself as part of the "peak oil camp," and does not agree with analysts such as Matthew Simmons. He considers himself optimistic about the future of energy, but pragmatic with regards to what resources are available and what level of production is possible.

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Fool me once…

The events since the BP well exploded and began spewing oil and gas into the Gulf of Mexico have forced President Obama's hand. No politician wants to be the one to catch the Peak Oil hot potato, but it looks like it's landed right in Obama's lap. In his Oval Office speech the other night, he came the closest any president has yet to frankly discussing the challenges we face (emphasis mine):

So one of the lessons we’ve learned from this spill is that we need better regulations, better safety standards, and better enforcement when it comes to offshore drilling. But a larger lesson is that no matter how much we improve our regulation of the industry, drilling for oil these days entails greater risk. After all, oil is a finite resource. We consume more than 20 percent of the world’s oil, but have less than 2 percent of the world’s oil reserves. And that’s part of the reason oil companies are drilling a mile beneath the surface of the ocean -- because we’re running out of places to drill on land and in shallow water. For decades, we have known the days of cheap and easily accessible oil were numbered. For decades, we’ve talked and talked about the need to end America’s century-long addiction to fossil fuels. And for decades, we have failed to act with the sense of urgency that this challenge requires. Time and again, the path forward has been blocked -- not only by oil industry lobbyists, but also by a lack of political courage and candor. The consequences of our inaction are now in plain sight.

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Deepwater horizon: an event horizon for the oil age?

In a speech given earlier this year, the Chief Economist for BP made his case that fears about peak oil were overblown.

"One factor is resources. They are limited, and a barrel can only be produced once. But ideas of peak oil supply are not true. Doomsayers have exaggerated the issue. The bell-shaped curve of production over time does not apply to the world's oil resources," he told the seminar in Alkhobar city. "Those who believe in peak oil tend to believe that technology and economics don't matter, and I think this is false.The application of technology, the innovation of new technology and economic forces especially mean that recoverable oil resources can increase. If there is a peak in oil, it will come from the demand side. There are always fears, but these remain overstated and exaggerated."
A barrel can only be produced once, this is true. And technology has allowed us to tap into oil reservoirs that were unthinkable a few decades ago. Yet as the catastrophic ongoing oil geyser in the Gulf of Mexico shows us, technology is not the savior the oil majors would have us believe. Advanced technology may allow us to drill for oil a mile under water, but it obviously does not offer any easy solutions when things go horribly awry as they have on the Deepwater Horizon rig, which has been spewing hundreds of thousands of barrels of oil into the Gulf of Mexico for over a month. [More . . . ]

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