The Starkest Warning
Whilst governments around the world are starting to wake up to the threat of increased oil prices, US President Obama grasps the nettle and gives his starkest warning from the Oval Office. It must be noted that addresses from the Oval Office are reserved for the most serious events; this is President Obama's first.
"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.
And do remember; the difference between cheap oil and expensive oil is simple. You and I, in our daily lives, depend on cheap oil to live, however our taxes will be paying for expensive oil to keep the fossil fuel paradigm moving. Armies, emergency services, government, public transport all depend on oil (not cheap oil), because these will be needed until the final barrel is removed from the ground. That final barrel will be worth billions of dollars, and it's the transition in price from now to then that we need to be concrened about as tax-paying citizens.
Technology
Probably one of the most important message given by the US President is the limits to technology. The skeptics of Peak Oil will constantly push the theory that technology is our saviour and that we (peak oil proponents), forget to note that as time moves forward, technology and science does too. We will continually find new ways to search, find, extract and process oil in the future, so there is no peak oil theory. However, the US President has noted, and I quote "This is not some distant vision for America. The transition away from fossil fuels is going to take some time", so the reality is:
Can technology keep pace with the time of transition?
This is the key factor, because whether is searching for oil, or finding replacements for oil such as algae, bio-fuels, wind farms, solar arrays etc, these need to be in place when that last barrel of cheap oil is extracted. If they are not, then we transition from cheap oil to expensive oil very quickly. How quickly? Well let's take a look at the past.
Fuel Transitions
The first fuel was probably wood. I don't think we could doubt very much that early mankind used wood to keep warm, cook and ward off predators. Ancient religions worshipped fire because it was essential to life. Further from that, we used water mills, wind mills, horses, donkeys, all these contributed to our need for energy. Coal is known to have been used for fuel as far back as 200BC, and accelerated dramaticallyduring the Industrial Revolution in the 19th Century. This transition was fast because coal was (and still is) so plentiful. It is reported that there are still a couple of centuries worth of coal yet to be mined. So the transition from wood to coal was easy, and we can see the benefits of that in a couple of easy points.
1) World population from the beginning of man to 1804 - 0 to 1 billion, then from 1804 - 1927 2 billion, then on to 3 billion in 1960, but the figure most startling is 3 billion to 6 billion by 1999. That's less than 40 years, 3 billion people added. This is due to fossil fuels in agriculture, albeit machinery and easy, cheap movement (including refrigeration) of food which allowed our cities to expand dramatically. We could build on the various "market gardens" in London (Covent Garden, Moor Fields, Bethnal Green etc) because we could move food into towns quickly using fast vehicles before it had the chance to go rotten on th back of a cart.
2) Economically we have found new wealth thanks to cheap energy. If you had to push a truck 100 miles, full of food physically using human beings, how many would it take, how long would it take and how much would you have to pay them? This is extreme because we would probably use horses, but only because they require cheap food and no money. If we had to feed horses in Beluga Caviar we wouldn;t be using them! We can assume that it would take weeks to pull the truck along the road using hundreds of people, all wanting payment of some kind and food. And yet cheap oil allowed us to do it in hours, for about 100 dollars (fuel $30, driver $70). So the potato you sell at the end of the journey only has to include a tiny percentage of the fuel it has cost to get it there.
There is no fuel today that can make the transition from oil painless. That is the reality of the situation we are in. We consume 85 million barrels worldwide every... single... day. Imagine the bio fuel rapeseed crop we would need, and the amount of wind turbines, solar arrays, algae...
And it's not just production. Just supposing we do find that all the clean energy we need, we need to move it around. The mining of copper that makes the wires that feeds our technology such as computers, overhead cabling etc has to be dug out of the ground, and those machines that dig and process need oil. There are no electric bulldozers, nor are there any companies with plans to make any. When the coal for the power stations is mined, it needs to be shipped... in fact everything needs to be shipped. We're only just looking at electric cars, never mind electric trucks that we need to move all that food around.
Transition is not a "wake up on Monday and everything works thanks to alternative fuels", it's a slow painful process which the vast majority of people will find very difficult. There will always be food at the supermarket, but will you have a job to get the money to be able to afford it? Remember the potato on our truck pulled 100 miles?
The change will be very quick. How many times has a phone rung and the split second before it's answered your world is at peace, then within a moment you are confronted with devastating news that at best ruins your day, at worst changes the rest of your life. Phone ring, knock at the door, news report. Change can happen quickly, and whilst many things we cannot prepare for, some things we can mitigate the initial shock which will make us think clearly.
Opinion
It is my opinion that we are being given a very clear warning. However, it must be noted (and I can hear some of you reading this thinkin it), that this is not the first time a US President has warned about a shortage of oil. Jimmy Carter first made a simlar speech (text version) in 1979 after the oil crisis which crippled the US fuel supplies. However the difference here was that many OPEC oil fields not been online for very long and there were new "elephant fields" being discovered all the time. When a news report mentions the discovery of a new oil field remember a couple of things:
1) An oil field, from time of discovery until time of actually taking oil out of the ground for refining, takes a minimum of 3 years.
2) We use 85 million barrels per day so a field containing an estimated 1 billion barrels will last approximately 11 days. So why do oil companies bother to look and extract such a short supply of oil? Because they know, by the time that field is online, the price ber barrel will be much higher than today. Remember cheap oil and expensive oil? When a field has trillions of barrels, it's still worthwhile taking out of the ground at a much cheaper price because there's so much to extract.
3) Oil companies continue to trumpet "huge" finds because if they don't investors will move their money elsewhere. Therefore, if an oil company is quoting "proven reserves" do remember it's in their interest to show how successful they are. I take these figures with a pinch of salt.
4) The BP disaster has shown us that we are now needing to drill in difficult places. If there is so much oil still around, why are they bothering? In fact, Royal Dutch Shell plc and Exxon Mobil have just reopened an old field in Holland (Reuters).
Do not have any doubt. If over the next few months you see oil constantly on your television screens, especially if it has little to do directly with the BP disaster in the Gulf of Mexico, you need to take serious notice. US Presidents do not make these speeches unless there is a serious need to do so. It is their duty in public office to inform the US public if there is a threat to their way of life.
Tin Foil Hat
This comment is purely conjecture and a personal opinion. I have labelled it Tin Foil Hat because it has no evidnce or basis of truth, however I feel it is worthy of note.
I mentioned on a previous blog elsewhere about two weeks ago that the BP event in the Gulf was "the new 9/11". The US President thinks so too. We all know that 9/11 changed the world forever. It has been quoted as the "New Pearl Harbor" event which changed American foreign policy as well as the world at large. This is beyond doubt. Some may be of the opinion that this event focussed the US public to accept the threat of terrorism, and allow legislation ("The US Patriot Act") to be implemented to protect them. It is well documented elsewhere in the web that civil liberties have possibly been eroded thanks to this Act, I'll leave that up to you to decide.
So bearing in mind that huge events can change public opinion is it possible that:
1) This pipeline was sabotaged to implement a new acceptance of restricted oil use.
2) The era of cheap oil is now over, and the Gulf spill was necessary to introduce a new Clean Energy Act in the near future? An Act where oil products will be restricted, rationed or taxed to pay for new energy projects ( "A Transition")
Thank you for reading, I will post again when I have time or events dictate.
Kieran (UK). June 16th 2010
"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. Countries like China are investing in clean energy jobs and industries that should be right here in America. Each day, we send nearly $1 billion of our wealth to foreign countries for their oil. And today, as we look to the Gulf, we see an entire way of life being threatened by a menacing cloud of black crude.
We cannot consign our children to this future. The tragedy unfolding on our coast is the most painful and powerful reminder yet that the time to embrace a clean energy future is now. Now is the moment for this generation to embark on a national mission to unleash America's innovation and seize control of our own destiny.
This is not some distant vision for America. The transition away from fossil fuels is going to take some time, but over the last year and a half, we've already taken unprecedented action to jumpstart the clean energy industry. As we speak, old factories are reopening to produce wind turbines, people are going back to work installing energy-efficient windows, and small businesses are making solar panels. Consumers are buying more efficient cars and trucks, and families are making their homes more energy-efficient. Scientists and researchers are discovering clean energy technologies that someday will lead to entire new industries.
Each of us has a part to play in a new future that will benefit all of us. As we recover from this recession, the transition to clean energy has the potential to grow our economy and create millions of jobs -- but only if we accelerate that transition. Only if we seize the moment. And only if we rally together and act as one nation -- workers and entrepreneurs; scientists and citizens; the public and private sectors.
When I was a candidate for this office, I laid out a set of principles that would move our country towards energy independence. Last year, the House of Representatives acted on these principles by passing a strong and comprehensive energy and climate bill -- a bill that finally makes clean energy the profitable kind of energy for America's businesses."
There is no doubt that the world's public are being groomed to accept a very near future without cheap oil. I will come to the choices you, as an individual, may have in a moment, but for the time being, we need to examine the urgency of this message. Whilst the president hasn't said explicitly we are at "Peak Oil", the inference is clear. We would not be risking the envirnoment, or stretching technology to its limit, unless we were running short of cheap oil.And do remember; the difference between cheap oil and expensive oil is simple. You and I, in our daily lives, depend on cheap oil to live, however our taxes will be paying for expensive oil to keep the fossil fuel paradigm moving. Armies, emergency services, government, public transport all depend on oil (not cheap oil), because these will be needed until the final barrel is removed from the ground. That final barrel will be worth billions of dollars, and it's the transition in price from now to then that we need to be concrened about as tax-paying citizens.
Technology
Probably one of the most important message given by the US President is the limits to technology. The skeptics of Peak Oil will constantly push the theory that technology is our saviour and that we (peak oil proponents), forget to note that as time moves forward, technology and science does too. We will continually find new ways to search, find, extract and process oil in the future, so there is no peak oil theory. However, the US President has noted, and I quote "This is not some distant vision for America. The transition away from fossil fuels is going to take some time", so the reality is:
Can technology keep pace with the time of transition?
This is the key factor, because whether is searching for oil, or finding replacements for oil such as algae, bio-fuels, wind farms, solar arrays etc, these need to be in place when that last barrel of cheap oil is extracted. If they are not, then we transition from cheap oil to expensive oil very quickly. How quickly? Well let's take a look at the past.
Fuel Transitions
The first fuel was probably wood. I don't think we could doubt very much that early mankind used wood to keep warm, cook and ward off predators. Ancient religions worshipped fire because it was essential to life. Further from that, we used water mills, wind mills, horses, donkeys, all these contributed to our need for energy. Coal is known to have been used for fuel as far back as 200BC, and accelerated dramaticallyduring the Industrial Revolution in the 19th Century. This transition was fast because coal was (and still is) so plentiful. It is reported that there are still a couple of centuries worth of coal yet to be mined. So the transition from wood to coal was easy, and we can see the benefits of that in a couple of easy points.
1) World population from the beginning of man to 1804 - 0 to 1 billion, then from 1804 - 1927 2 billion, then on to 3 billion in 1960, but the figure most startling is 3 billion to 6 billion by 1999. That's less than 40 years, 3 billion people added. This is due to fossil fuels in agriculture, albeit machinery and easy, cheap movement (including refrigeration) of food which allowed our cities to expand dramatically. We could build on the various "market gardens" in London (Covent Garden, Moor Fields, Bethnal Green etc) because we could move food into towns quickly using fast vehicles before it had the chance to go rotten on th back of a cart.
2) Economically we have found new wealth thanks to cheap energy. If you had to push a truck 100 miles, full of food physically using human beings, how many would it take, how long would it take and how much would you have to pay them? This is extreme because we would probably use horses, but only because they require cheap food and no money. If we had to feed horses in Beluga Caviar we wouldn;t be using them! We can assume that it would take weeks to pull the truck along the road using hundreds of people, all wanting payment of some kind and food. And yet cheap oil allowed us to do it in hours, for about 100 dollars (fuel $30, driver $70). So the potato you sell at the end of the journey only has to include a tiny percentage of the fuel it has cost to get it there.
There is no fuel today that can make the transition from oil painless. That is the reality of the situation we are in. We consume 85 million barrels worldwide every... single... day. Imagine the bio fuel rapeseed crop we would need, and the amount of wind turbines, solar arrays, algae...
And it's not just production. Just supposing we do find that all the clean energy we need, we need to move it around. The mining of copper that makes the wires that feeds our technology such as computers, overhead cabling etc has to be dug out of the ground, and those machines that dig and process need oil. There are no electric bulldozers, nor are there any companies with plans to make any. When the coal for the power stations is mined, it needs to be shipped... in fact everything needs to be shipped. We're only just looking at electric cars, never mind electric trucks that we need to move all that food around.
Transition is not a "wake up on Monday and everything works thanks to alternative fuels", it's a slow painful process which the vast majority of people will find very difficult. There will always be food at the supermarket, but will you have a job to get the money to be able to afford it? Remember the potato on our truck pulled 100 miles?
The change will be very quick. How many times has a phone rung and the split second before it's answered your world is at peace, then within a moment you are confronted with devastating news that at best ruins your day, at worst changes the rest of your life. Phone ring, knock at the door, news report. Change can happen quickly, and whilst many things we cannot prepare for, some things we can mitigate the initial shock which will make us think clearly.
Opinion
It is my opinion that we are being given a very clear warning. However, it must be noted (and I can hear some of you reading this thinkin it), that this is not the first time a US President has warned about a shortage of oil. Jimmy Carter first made a simlar speech (text version) in 1979 after the oil crisis which crippled the US fuel supplies. However the difference here was that many OPEC oil fields not been online for very long and there were new "elephant fields" being discovered all the time. When a news report mentions the discovery of a new oil field remember a couple of things:
1) An oil field, from time of discovery until time of actually taking oil out of the ground for refining, takes a minimum of 3 years.
2) We use 85 million barrels per day so a field containing an estimated 1 billion barrels will last approximately 11 days. So why do oil companies bother to look and extract such a short supply of oil? Because they know, by the time that field is online, the price ber barrel will be much higher than today. Remember cheap oil and expensive oil? When a field has trillions of barrels, it's still worthwhile taking out of the ground at a much cheaper price because there's so much to extract.
3) Oil companies continue to trumpet "huge" finds because if they don't investors will move their money elsewhere. Therefore, if an oil company is quoting "proven reserves" do remember it's in their interest to show how successful they are. I take these figures with a pinch of salt.
4) The BP disaster has shown us that we are now needing to drill in difficult places. If there is so much oil still around, why are they bothering? In fact, Royal Dutch Shell plc and Exxon Mobil have just reopened an old field in Holland (Reuters).
Do not have any doubt. If over the next few months you see oil constantly on your television screens, especially if it has little to do directly with the BP disaster in the Gulf of Mexico, you need to take serious notice. US Presidents do not make these speeches unless there is a serious need to do so. It is their duty in public office to inform the US public if there is a threat to their way of life.
Tin Foil Hat
This comment is purely conjecture and a personal opinion. I have labelled it Tin Foil Hat because it has no evidnce or basis of truth, however I feel it is worthy of note.
I mentioned on a previous blog elsewhere about two weeks ago that the BP event in the Gulf was "the new 9/11". The US President thinks so too. We all know that 9/11 changed the world forever. It has been quoted as the "New Pearl Harbor" event which changed American foreign policy as well as the world at large. This is beyond doubt. Some may be of the opinion that this event focussed the US public to accept the threat of terrorism, and allow legislation ("The US Patriot Act") to be implemented to protect them. It is well documented elsewhere in the web that civil liberties have possibly been eroded thanks to this Act, I'll leave that up to you to decide.
So bearing in mind that huge events can change public opinion is it possible that:
1) This pipeline was sabotaged to implement a new acceptance of restricted oil use.
2) The era of cheap oil is now over, and the Gulf spill was necessary to introduce a new Clean Energy Act in the near future? An Act where oil products will be restricted, rationed or taxed to pay for new energy projects ( "A Transition")
Thank you for reading, I will post again when I have time or events dictate.
Kieran (UK). June 16th 2010
No comments:
Post a Comment
Note: only a member of this blog may post a comment.