Peak Oil: Russia's oil production is coming down
Commodity Online
MOSCOW: Oil production in Russia, the second largest oil exporter in the world, is coming down drastically, says a new study.

Studies on Russian oil production by Aram Mäkivierikko say that the country has not been able to increase its oil production for three months in a row now. The production have been hanging slightly below the maximum of 9,93 Mbpd that was reached last year in October.

The report said if their oil production is stagnating, the impact is therefore going to be significant. Output has declined by between 0.5% to 1.5% for most major Russian producers, including the state-controlled Rosneft. Only LUKOIL and Tatneft managed to increase their output by 0.1% and 0.6% respectively.

Oil is a heavily used natural resource with a limited supply. Russia is one of the largest oil producers and the second largest oil exporting country in the world. Many surrounding countries are dependent on Russian energy. Swedish oil import from Russia has grown from 5% to 35% during 2001-2005.

The fall of the Soviet Union in 1991 caused the Russian oil production to drop by 50%. The production is currently growing again – but how will it develop in the future?

This report studies different scenarios for Russian oil production and export based on three different estimates of how much oil Russia has left today (70, 120 or 170 Gb), combined with estimates about how fast Russia can produce the oil (a depletion rate of 3%, 4.5% or 6%).

In the worst case, Russian oil production and also the oil export will peak very soon or has already done so in 2006. In the best case, a constant export can be held until 2036. It is not likely that the Russian production will increase more than 5-10% over today’s level.

http://www.commodityonline.com/news/topsto...ils.php?id=7094

End of the world as we know it
You might feel fine, but high oil cost, scarcity mean American Empire is about to come crashing down

Guy R. McPherson
University of Arizona professor
Apr. 6, 2008 12:00 AM
Peak oil spells the end of civilization. And, if it's not already too late, perhaps it will prevent the extinction of our species.

M. King Hubbert, a petroleum geologist employed by Shell Oil Co., described peak oil in 1956. Production of crude oil, like the production of many non-renewable resources, follows a bell-shaped curve. The top of the curve is termed "peak oil," or "Hubbert's peak," and it represents the halfway point for production.

The bell-shaped curve applies at all levels, from field to country to planet. After discovery, production ramps up relatively quickly. But when the light, sweet crude on top of the field runs out, increased energy and expense are required to extract the underlying heavy, sour crude. At some point, the energy required to extract a barrel of oil exceeds the energy contained in barrel of oil, so the pumps shut down.
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Most of the world's oil pumps are about to shut down.

We have sufficient supply to keep the world running for 30 years or so, at the current level of demand. But that's irrelevant because the days of inexpensive oil are behind us. And the American Empire absolutely demands cheap oil. Never mind the 3,000-mile Caesar salad to which we've become accustomed. Cheap oil forms the basis for the 12,000-mile supply chain underlying the "just-in-time" delivery of plastic toys from China.

There goes next year's iPod.

In 1956, Hubbert predicted the continental United States would peak in 1970. He was correct, and the 1970s gave us a small, temporary taste of the sociopolitical and economic consequences of expensive oil.

We passed the world oil peak in 2005, and we've been easing down the other side by acquiring oil at the point of a gun - actually, guns are the smallest of the many weapons we're using - paying more for oil and destroying one culture after another as the high price of crude oil forces supply disruptions and power outages in Third World countries.

The world peaked at 74.3 million barrels per day in May 2005. The two-year decline to 73.2 million barrels per day produced a doubling of the price of crude. Later this year, we fall off the oil-supply cliff, with global supply plummeting below 70 million barrels/day. Oil at merely $100 per barrel will seem like the good old days.

Within a decade, we'll be staring down the barrel of a crisis: Oil at $400 per barrel brings down the American Empire, the project of globalization and water coming through the taps. Never mind happy motoring through the never-ending suburbs in the Valley of the Sun. In a decade, unemployment will be approaching 100 percent, inflation will be running at 1,000 percent and central heating will be a pipe dream.

In short, this country will be well on its way to the post-industrial Stone Age.

After all, no alternative energy sources scale up to the level of a few million people, much less the 6.5 billion who currently occupy Earth. Oil is necessary to extract and deliver coal and natural gas. Oil is needed to produce solar panels and wind turbines, and to maintain the electrical grid.

Ninety percent of the oil consumed in this country is burned by airplanes, ships, trains and automobiles. You can kiss goodbye groceries at the local big-box grocery store: Our entire system of food production and delivery depends on cheap oil.

If you're alive in a decade, it will be because you've figured out how to forage locally.

The death and suffering will be unimaginable. We have come to depend on cheap oil for the delivery of food, water, shelter and medicine. Most of us are incapable of supplying these four key elements of personal survival, so trouble lies ahead when we are forced to develop means of acquiring them that don't involve a quick trip to Wal-Mart.

On the other hand, the forthcoming cessation of economic growth is truly good news for the world's species and cultures. In addition, the abrupt halt of fossil-fuel consumption may slow the warming of our planetary home, thereby preventing our extinction at our own hand.

Our individual survival, and our common future, depends on our ability to quickly make other arrangements. We can view this as a personal challenge, or we can take the Hemingway out. The choice is ours.

For individuals interested in making other arrangements, it's time to start acquiring myriad requisite skills. It is far too late to save civilization for 300 million Americans, much less the rest of the planet's citizens, but we can take joy in a purpose-filled, intimate life.

It's time to push away from the shore, to let the winds of change catch the sails of our leaky boat.

It's time to trust in ourselves, our neighbors and the Earth that sustains us all.

Painful though it might be, it's time to abandon the cruise ship of empire in exchange for a lifeboat.

http://www.azcentral.com/arizonarepublic/v...herson0406.html

A movie I really need to see: The End of Suburbia

http://www.endofsuburbia.com/
http://www.endofsuburbia.com/preview1.htm

Mexico's Cantarell field is in pretty sharp decline. The North Sea is seeing deline rates of over 4% per year. Saudia Arabia is drilling holes in Ghawar as fast as possible to keep production up, but they're still unable to do anything other than maintain current levels as the old wells are producing less.

Things are not looking good on the global oil front.

Some people will run in here and say that we just found 500 billion barrels under the Dakotas and Montana. But in reality all we've done is move that oil from the unconventional to conventional. The recovery rates on that field are at best going to be 10-20% because of how the oil is distributed, not to mention a very low EROEI because of the technology needed to get at it, and the fact that overall rate of productions aren't expected to be high due to those same limitations. Just about the best we could hope for the Bakken field is to somewhat mitigate deline rates in other fields.

Or we could get our heads out of our asses and get down to some real solutions.

We better do it quick. Though it might be fun in a perverse way to watch the collapse.

So, living in the mountians, sitting on stockpiled food, guns, ammo and supplies. Knowing how to hunt, fish, farm and skills to provide for you`r own basic medical care is a wise option?

I would have never guessed it. 8DRTV75

End of Suburbia is just about spot on with what we're about to see. Most people don't understand just how addicted we are to oil, how ingrained it is in everything we do, and how drastically life cahnges when it becomes scarce. It's funny that America was sold an entire way of life that was completely unsustainable for anything more than a hundred years.

I disagree that no alternative scales up to meet oil. Solar easily does it. Wind easily does it. Nuclear easily does it. Those three combined have no problem powering the nation forever. The problem is getting serious about making that switch while there's still enough spare oil to do it.

Since 90% of all the oil we burn goes to vehicles, that's the obvious place to start. Get some legislation with some teeth. Set CAFE standard that matter - 65 MPG to start. Set federal standards for EVs and mandate that a certain % of all vehicles sold will be zero emmissions vehicles. Rebuild our rail system so we can move goods efficiently rather than trucking them all over the country at 3 MPG.

We have the technology right now to do this. It doesn't have to develop for another second. We just have to use it.

If you ever wanted to see just how eaily we could end our dependence on foreign oil and set ourselves up for a sustainable economy, Scientific American lays it out:
A Grand Solar Plan
A plan to run the nation on solar by 2050. And that's just using one carbon free fuel sourse. Add in wind and nuclear and we could do it in much less time for much less money. All while creating jobs for Americans and growing our economy.

Exactly. It's just a matter of making it happen, taking a few hundred billion dollars and totally rethinking our infrastructure.

Though my natural cynicism leads me to believe that won't happen anytime soon.

This is a magazine ad run by Shell Oil:

Link to actual ad.

When Shell Oil starts sponsoring ads warning of the serious consequences of Peak Oil and saying that we need to go to renewables rather than pissing in the wind with oil shale and other unconventional sourses, the party's just about over.

Oil peak theorist warns of chaos, war
Veteran oil industry financier paints grim picture of resource scarcity, derailed global growth; others disagree

SHAWN MCCARTHY

April 8, 2008

WASHINGTON -- Matt Simmons sounds the alarm like the Cassandra of the oil industry, warning that crude production has peaked and that looming energy shortages could derail global growth and even spark armed conflict.

As a prominent "peak oil" theorist, the veteran oil industry financier paints a grim picture of a world facing resource scarcity. Still, it doesn't take a "peak-ist" to conclude that the global oil producers will find it increasingly difficult to keep up with growing demand.

He squared off yesterday against other experts who argue that the world has yet to reach the physical limits of oil production. But while they disagreed on the extent of the problem, the panelists at a U.S. Department of Energy conference in Washington concurred that future crude production will be constrained by physical, economic and political factors that add up to tight markets and higher oil prices.

Despite oil prices that have topped $100 (U.S.) a barrel, there was little sense at yesterday's conference, put on by the Department of Energy's Energy Information Administration, that high prices would spark either a boost in oil output or a sharp fall in global demand.
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The Globe and Mail

Record pump prices - and a sharply slowing economy - have cut into U.S. demand, which represents 25 per cent of the world's total. But analysts who follow the emerging economies said there is no sign yet that triple-digit crude prices have seriously dented demand in China or India.

Global demand for oil will continue to grow, analysts forecast, even as the developed world reduces consumption in the face of high prices and environmental concerns. Economic growth and rising living standards in developing countries like China, India and the Middle East will more than offset reduced energy consumption in the mature economies of North America and Europe.

The views of Mr. Simmons, who runs Houston-based Simmons & Assoc. investment bank, bordered on apocalyptic.

Oil shortages "could lead to social chaos and war," he warned. "The issue is the most serious risk to sustaining the 21st century. Peak oil is real, and we have to take it seriously." He argued that production of conventional crude peaked in May, 2005, at 74 million barrels a day.

Since then, the world has met rising consumption - now at about 88-million barrels a day - by cutting inventories, tapping natural gas liquids that typically are included in crude production figures and using better refinery efficiencies.

Peter Jackson, a director at the Cambridge Energy Research Assoc., said Mr. Simmons was overstating decline rates of existing fields, was not taking into account the prospect for new discoveries, and played down the importance of unconventional resources such as Canada's oil sands.

Still, he said the industry faced "above ground" problems that would make it difficult to keep production growing fast enough to meet rising demand. About 90 per cent of existing conventional reserves are controlled by state-owned oil companies, many of which are not investing enough in capacity expansion, he said.

At the same time, the industry worldwide has seen construction costs explode, even as oil companies are forced to exploit smaller, more remote and more geologically complex reserves. The average cost of producing a barrel of oil has more than doubled in the past eight years, with most of that increase occurring in the past four, he said.

James Schlesinger, who was the United States' first energy secretary 30 years ago during the oil shock of the late 1970s, warned of a new crisis looming.

That 1970s shock was the result of supply disruptions caused by the 1973 Arab embargo and then the Iranian revolution. The current runup in prices reflects a more fundamental disconnect between constrained supplies and rising demand in the developing world, he said.

"At some point during the decade immediately ahead, we will hit a plateau, and this will have a tremendous shock both economically and politically," Mr. Schlesinger said.

http://www.theglobeandmail.com/servlet/sto...PStory/Business

With the potential consequences of Peak Oil, do you think 2050 as a timetable is soon enough?

It would seem to me that this country should undergo a drastic 1 decade plan, involving a fairly isolationist outlook (only in the short-term) that would allow us to fund a revolutionary new means of existence for this country. Only when we have achieved that should we attempt to become world players again.

I would personally like to see a national effort to ramp up alternatives, revamp our rail system, and bring in vehicle efficiency technology so that we're off of foreign oil in a decade. Even going so far as to have a moratorium on imported oil - every year we will limit imports to 10% less than in the base year so that in a decade we simply could not import oil.

This would mean that a combination of alternatives and efficiency would need to be brought on line every year equivalent to 10% of our foreign oil imports plus whatever amount our economy grows. It would be TOUGH, but do able if we were serious about the efficiency end. Efficiency will be the key in the short term until energy production gets ramped up. We'll have to be able to get more done with less energy - moving people and goods, producing goods, and running buildings. The good news is that efficiency is by far and away cheaper than making new power. It's less than half the cost to remove a megawatt of demand through efficiency than to produce a megawatt of power.

Realistically, the 2050 timeframe is well within that which would keep our economy strong and avoid peak oil catastrophy. Remember that the U.S. burns 25% of all the oil in the world every day. If we set about removing our demand, it has a dramatic effect on world demand. All we need to do is be able to make up the 1-2% slide in the difference between world production and U.S. demand.

I also think that once alternatives are able to offer energy cheaper than fossil fuels, the chance will happen much quicker than 2050. It could litterally be a decade even without a moratorium on imports. Just the free market finding out that there's a better way.

I gotta say, hearing that from you is reassuring, even if I have little faith. I'm just scared it is going to take catastrophe before the nation as a whole, and those elected to lead it, wake up and make real changes.

I pretty much have to take that point of view, otherwise I get so depressed .... !ff/:

No shit.

I feel ya. Despite my long term cynicism, I manage to remain fairly optimistic on a day to day basis. Maybe it's because while I'm very pessimistic about the human race, I love people and continually am impressed by individuals' ability to react to situations with grace and compassion.

It's when we herd that I get worried.

Well, I finally did it. I sat and read Matt Savinar's entire webpage. Bad idea.


I think I'm gonna go home, get drunk as hell, and tomorrow buy some arable land in the middle of nowhere, and hopefully learn how to hunt, fish, and farm.

Oh, and somewhere along the way find a purdy lady to accompany me.





:(

I'm telling you, you have to stay away from the doom and gloomers. Too much exposure to that shit will spin you into a depression quicker than your dog dying.

I got really bad into it a while ago. Now, I have to have the attitutde that we'll do whatever is necessary to make the changes needed. Americans lived great lives 50 yrears ago using about 1/10th the oil we use now. We'll live great lives in 50 years using 1/10th the oil we use now. In fact, we'll probably live better, more fulfilling lives than we live now.

This is the type of thing that will happen more and more with peak oil squeezing us. Busineses will begin setting up services to bring mass transit to places that don't have it. And this will have a couple of consequences.

People will realise how much money they're saving by only paying $20-50/month for all their travel to and from work. So not only will they have less hastle from driving in congested metro traffic, they'll have more money to spend on other things they want. Quality of life went up even though car use went down.

As more people use bus services the highways will begin to be less clogged. So they'll get to work faster by bus because they didn't sit in a traffic jam for 45 minutes each way every day. So they have more free time. Quality of life went up even though car use went down.

America's fuel use could take a significant nose dive. This would mitigate the effects of peak oil and give us the time to make the changes we'll have to make.

Express Bus Service Gets Good Marks

(WSB Radio) -- With the continued rise of gas prices, it's not surprising that they're choosing alternate forms of transportation.
A recent survey conducted by the Georgia Regional Transportation Authority (GRTA) shows riders used to choose the bus so they work on their laptops while on their way to work.

GRTA spokesman William Mecke tells WSB's Jennifer Griffies, "This year we got a little stronger with gas prices up over three dollars...it's not surprising."

The vast majority who ride the bus everyday are middle-aged and predominantly female.

The survey also showed that more than two thirds of the riders said the bus was their alternative to driving.

Two-thirds have two or more vehicles at home. Fifteen percent of the customers live outside the 12 Metro Atlanta counties which subsidize express commuter services.

Here's why I'm fairly optimistic about our energy future. It seems that some officials with enough clout to get results are realising that there's a serious problem and that we need to act now. They're also beginning to realise that efficiency is the first step. It's the cheapest and quickest way to reduce fossil fuel need.

MARYLAND LEGISLATION TAPS ENERGY EFFICIENCY AS THE “FIRST FUEL” GOVERNOR O’MALLEY’S ENERGY EFFICIENCY BILLS ARE PASSED BY LEGISLATURE

Washington, D.C.—Maryland's legislators gave final approval this week to two landmark energy bills that together aim to reduce the state's energy consumption by 15% by 2015. The legislation, proposed by Governor Martin O'Malley, sets the stage for Maryland to become a leader in capturing the benefits of energy efficiency.

"These two bills provide a foundation for a clean and sustainable energy future for the state of Maryland," said Steven Nadel, Executive Director of the American Council for an Energy-Efficient Economy (ACEEE). "Maryland's policies now recognize energy efficiency as the 'first fuel' for meeting its future energy needs.

A study released in February by ACEEE evaluated a suite of energy efficiency policies for Maryland and found that more than enough energy efficiency resources exist in the state to meet Governor O'Malley's ambitious 15 by '15 goal, and confirmed that reducing electricity consumption is the quickest, cheapest, and cleanest way for policymakers to bring consumer bills down and keep the lights on in the state.

Two of the bills are key to meeting the Governor's goals. The first codifies the goal of reducing per capita electricity consumption 15 percent by 2015. This target, known as an energy efficiency resource standard, will require the state's electric utilities to achieve 10% savings by 2015 and the Maryland Energy Administration (MEA) to oversee programs to meet the remaining 5%. The second bill establishes a Strategic Energy Investment Fund supported by the proceeds of upcoming auctions of the state's carbon dioxide emission allowances and administered by MEA. About half of this new fund, which is expected to reach $100 million or more per year, is to be expended on programs to reduce energy consumption, including low- and moderate-income electric customers.

In addition, the General Assembly passed a bill that requires energy-efficient and environmentally friendly design and materials for new state buildings and public schools, and a separate bill that boosts the state's renewable portfolio standard (a target for the portion of the state's energy derived from wind, solar, and other renewable sources) to 20 percent by 2022.

“Among all the possible energy resources available to the state, energy efficiency is the least-cost and the quickest to deploy," said Maggie Eldridge, ACEEE's State Team Leader. "By committing to investing in energy efficiency, Maryland can meet its future electricity needs while containing energy costs for the state's consumers. This legislation is an extremely smart investment for all Marylanders.”

ACEEE's analysis shows that the benefits of energy efficiency include lower consumer electric bills, improved system reliability, significant job and economic development in the state, and reduced pollution. “Our analysis of policy options available to Maryland identified potential net consumer electric bill savings of about $900 million and over 8,000 new in-state jobs in 2015," said Eldridge. "The provisions included in this year's energy legislation and last year's appliance efficiency standards address about 90% of the efficiency savings that we identified.”

“Helping consumers save energy means helping families reduce their electric bills,” said Ed Osann, Senior Associate with ACEEE. “We commend the General Assembly for answering the Governor's call to help Marylanders make their energy use more efficient.”

“The foundation for a more energy-efficient Maryland is now in place,” said Neal Elliott, ACEEE's Associate Director for Research. "ACEEE looks forward to working with the Maryland Energy Administration, the Public Service Commission, utilities, and consumers as new programs are developed that will achieve these ambitious goals. Based on our work with leading energy efficiency programs across the country, we are confident that Maryland can succeed."

Energy Efficiency: The First Fuel for a Clean Energy Future—Resources for Meeting Maryland's Electricity Needs can be downloaded for free at http://aceee.org/pubs/e082.htm or purchased for $50 plus $5 postage and handling from ACEEE Publications, 1001 Connecticut Avenue, N.W., Suite 801, Washington, D.C. 20036-5525, phone: 202-429-0063, fax: 202-429-0193, e-mail: aceee_publications@aceee.org.

Peak and ye shall find-it doesn’t have to be so bad

Let’s begin with a silly bet sent out by ASPO (Association for the Study of Peak Oil) to CERA (Cambridge Energy Research Associates, part of IHS). It wasn’t bad marketing: I suspect that some magazine(s) will publish the supposed $100,000 bet. But eventually I came to see it as the publicity stunt that it was. CERA won’t take the bet, and even if they did, money would never change hands from the non-profit ASPO to the profitable CERA in nine years. The bet was whether CERA’s recent forecast of 112 million barrels a day of global “oil” production capacity by 2017 would materialize, up from about 87 million today.

There was a lot of the usual loose language. Besides “oil” production capacity , which isn’t provable, what constituted “oil” wasn’t defined, and a new number for capacity in 2017 was offered based on today’s ratio of production to supposedly unused capacity, which, again, is not provable. Even if “official” IEA numbers were used, the ratio of production to excess capacity has varied widely both up and down in the last six years, so its applicability to 2017 is doubtful.

The worst part of “the bet” was the “Optimists Club-CERA vs. Reality” scorecard, wherein several of CERA’s worst predictions of the past were contrast with what actually happened. What made it so pathetic was the fact that all of the leading Peakers have also made previous predictions that did not come to pass, even King Hubbert himself-the fellow who started the movement. It’s become the custom of Peakers to just add five years to the last failed prediction and continue to sound the alarm.

For CERA’s part, the consultancy hasn’t been too kind either, considering that the title of one of their research pieces is: Why the Peak Oil Theory Falls Down: Myths, Legends and the Future of Oil Resources , as well as the comment by one of its lead researchers to a reporter: “Peak oil theory is garbage.”

It’s worth noting that CERA’s 112 million bpd requires an inexplicable increase (to ~2.3% annually) in the rate of global oil capacity over the coming 9 years, compared to the last 20 years (~1.5%). This is difficult to believe given today’s high prices and increasing efficiencies.

Now after having said all that, it is true that, whatever the level of risk was that global “oil” production would peak, that risk has increased over the past 18 months. Conventional crude (plus lease condensate) production has not increased over the past two years, and various sources, including the international IEA, the US’ EIA, the JODI database and World Oil all show year-to-year average crude production falling a little in the 2006-2007 period, somewhere in the -0.4% to -1.5% range.

For now, depletion is beating conventional oil production. Later this year and next, at least 5 million bpd is scheduled to come online, particularly in Saudi Arabia, where well-drilling rates have been strong while production has declined. But construction delays, Saudi’s desire for unused capacity buildup, or various OPEC decisions could delay some of that production.

Farther down the road, if Brazil’s recently discovered, Ghawar-sized group of oil fields hold up to appraisal, they could be adding 1 million bpd or more in perhaps eight years (confirming the world is virtually unexplored in well depths below 15,000 ft). But that is too long to avoid a production shortfall-unless demand crashes too.

However, IEA says that global demand was up a modest 1.2% last year, and 2008 is forecast to be up 2.3% (although I think that those demand numbers are too high). IEA is increasingly making up for falling conventional oil with all the other liquids that are sometimes called “oil,” including refinery gain. If this continues, it will become increasingly difficult to believe. This is because the liquids that can pass for “oil” cannot grow fast enough in a business-as-usual case, except for Natural Gas Liquids (NGLs), which could add the needed volumes to make the supply/demand equation balance. The problem with relying on NGLs is that it implies a 7-8% annual growth rate in gas production-an unlikely pace. In other words, global “oil” production is becoming increasingly dependent on global gas production.

However, another way to balance falling supply and continue the status quo is to destroy demand. The smart money would bet on history. Try this: Name a commodity that hasn’t eventually gone from boom to bust. Can’t name even one? And if you look back at a 30-year oil price chart, and try to justify every squiggle, you’ll find it is a collection of improbable events. So, if the improbable is the most likely thing to happen, it opens up a wealth of possibilities as to how oil demand could go flat or even crash-and prices along with it.

If anyone had said in the 1980s that the Japanese juggernaut would go into a 12-year recession, he would have been laughed at. Accordingly, it is entirely possible that Chinese and Western demand could flatten and thus, balance the supply equation. Another US Great Depression would also do the trick. There are numerous other ways to get supply and demand to balance: resource wars, cataclysms, mass-extinction meteorites, nuclear Armageddon-so cheer up, an oil supply gap can be averted with falling demand.

Even if oil does peak and demand remains positive, the effects might not be all that bad. Alternatives would begin to come on strong, as market forces, while lagging, would nevertheless kick in with surprising speed. Sure, we might have to get used to “stagflation” again for awhile. And if energy prices go through the roof, and gasoline costs $12 a gallon, that will still be OK to those of us who can afford it. Plus, it will have the highly desirable side effect of keeping the Third World in their...well, let’s just say in third place. (After all, if everybody gets rich enough to buy a car, who will make my $80 tennis shoes for $1 in labor?)

It’s no secret that China, India, Malaysia and Africa, all want all the “stuff” that we oily-field folks have. I don’t blame them. It’s just that, lately, they don’t seem as willing to wait a few more centuries to get it. Really high energy prices can change that. There are many ways to mitigate, even benefit from, a peak in production. So cheer up! And let’s do nothing.

Or better still, take the politician’s cue, and do next to nothing. That way, we can at least feel like we’re minimizing any risk.

The Coming War with Iran: It's About the Oil, Stupid
Posted April 13, 2008 | 01:35 PM (EST)

World civilization is based on oil. The world is running out of oil. The oil companies and governments are not telling the truth about how close we are to the end. Dick Cheney knew about peak oil back in 1999 when he spoke to the London Petroleum Institute as Halliburton CEO. He predicted it would come in 2010. After that it's just a matter of years before it runs out. Whoever controls the remaining oil determines who lives and who dies.

Sixty percent of this oil is under a triangular area of the Middle East the size of Kansas. In that speech Cheney said: "The Middle East with two thirds of the world's oil and the lowest cost, is still where the prize ultimately lies."

This small Middle East triangle encompasses the northeast of Saudi Arabia, all of Iraq and the southwestern part of Iran, along with Kuwait, Qatar and the Emirates. The US controls Iraq. It has friendly governments in the other states.

Iran is the exception. The US now surrounds Iran.

Controlling an area the size of Kansas shouldn't be a problem for the U.S. military, except that it is heavily populated and many people in the triangle don't want the Americans there and are willing to fight.

It's been known for at least thirty years that America needs alternative energy sources. But instead of an alternative energy plan we got the invasion of Iraq by oilmen wedded to a dying business, willing to kill hundreds of thousands to cling to the last drop. The US is never leaving the region or withdrawing from Iraq. McCain is right about staying, but 100 years is too long. The oil won't last that long.

Iran is next. Lieberman set up Petraeus to testify last week that Iranian-backed groups are murdering hundreds of American servicemen in Iraq. On Friday Gates called Iran's influence in Iraq "malign" and Bush said if Iran keeps meddling in Iraq "then we'll deal with them." They are building their case for war with resolutions in the Senate and at the UN. It's only western Iran, from the Iraq border to 150 miles inside the country that the U.S. will have to occupy. That's where Iran's oil is. But the U.S. will have a nasty battle on their hands in Iran even if they restore a Shah-like puppet in Tehran 30 years after the revolution.

The Saudis would not mind seeing the Iranian regime go. But the Saudis may also be on the list. The US may have to destabilize and control Saudi Arabia some day too. The Wall Street Journal a few years ago revealed that in the 1970s under Nixon, Kissinger had plans drawn up for the US invasion and occupation of the Saudi oil fields. Those plans can be dusted off.

The American oil wars are being launched out of weakness, not strength. The American economy is teetering and without control of the remaining oil it will collapse. There will be massive chaos in any case, when only enough oil remains for the American elite and whomever they choose to share it with.

That will leave an oil-starved China and India, both with nuclear weapons, with no alternative but to bow to America or go to war.

It's not about greed any more. It's about survival. Because the leadership of this country was initially too greedy to switch from oil to solar, wind, geothermal and other renewable alternatives, it may now be too late. Had the hundreds of billions of dollars poured into the invasion and occupation of Iraq been put into alternative energy the world might have had a fighting chance. Now that is far from certain.

What is certain is that these wars are not about democracy. They are not about WMD. The coming one will not even be about Iran's nuclear weapons project. It's about the oil, stupid.

New Ways to Store Solar Energy for Nighttime and Cloudy Days

By MATTHEW L. WALD
Published: April 15, 2008

Solar power, the holy grail of renewable energy, has always faced the problem of how to store the energy captured from the sun’s rays so that demand for electricity can be met at night or whenever the sun is not shining.

The difficulty is that electricity is hard to store. Batteries are not up to efficiently storing energy on a large scale. A different approach being tried by the solar power industry could eliminate the problem.

The idea is to capture the sun’s heat. Heat, unlike electric current, is something that industry knows how to store cost-effectively. For example, a coffee thermos and a laptop computer’s battery store about the same amount of energy, said John S. O’Donnell, executive vice president of a company in the solar thermal business, Ausra. The thermos costs about $5 and the laptop battery $150, he said, and “that’s why solar thermal is going to be the dominant form.”

Solar thermal systems are built to gather heat from the sun, boil water into steam, spin a turbine and make power, as existing solar thermal power plants do — but not immediately. The heat would be stored for hours or even days, like water behind a dam.

A plant that could store its output could pick the time to sell the production based on expected price, as wheat farmers and cattle ranchers do. Ausra, of Palo Alto, Calif., is making components for plants to which thermal storage could be added, if the cost were justified by higher prices after sunset or for production that could be realistically promised even if the weather forecast was iffy. Ausra uses Fresnel lenses, which have a short focal length but focus light intensely, to heat miles of black-painted pipe with a fluid inside.

A competitor a step behind in signing contracts, but with major corporate backing, plans a slightly different technique in which adding storage seems almost trivial. It is a “power tower,” a little bit like a water tank on stilts surrounded by hundreds of mirrors that tilt on two axes, one to follow the sun across the sky in the course of the day and the other in the course of the year. In the tower and in a tank below are tens of thousands of gallons of molten salt that can be heated to very high temperatures and not reach high pressure.

“You take the energy the sun is putting into the earth that day, store it and capture it, put it into the reservoir, and use it on demand,” said Terry Murphy, president and chief executive of SolarReserve, a company backed in part by United Technologies, the Hartford conglomerate.

Power plants are typically designed with a heat production system matched to their electric generators. Mr. Murphy sees no reason why his should. His design is for a power tower that can supply 540 megawatts of heat. At the high temperatures it could achieve, that would produce 250 megawatts of electricity, enough to run a fair-size city.

It might make more sense to produce a smaller quantity and run well into the evening or around the clock or for several days when it is cloudy, he said.

At Black & Veatch, a builder of power plants, Larry Stoddard, the manager of renewable energy consulting, said that with a molten salt design, “your turbine is totally buffered from the vagaries of the sun.” By contrast, “if I’ve got a 50 megawatt photovoltaic plant, covering 300 acres or so, and a large cloud comes over, I lose 50 megawatts in something like 100 to 120 seconds,” he said, adding, “That strikes fear into the hearts of utility dispatchers.”

Thermal storage using molten salt can work in a system like Ausra’s, with miles of piping, but if the salt is spread out through a serpentine pipe, rather than held in a heavily insulated tank, it has to be kept warm at night so it does not solidify, among other complications.

A tower design could also allow for operation at higher latitudes or places with less sun. Designers could simply put in bigger fields of mirrors, proponents say. A small start-up, eSolar, is pursuing that design, backed by Google, which has announced a program to try to make renewable electricity for less than the price of coal-fired power.

Mr. Murphy helped build a power tower at a plant in Barstow, Calif., sponsored by the Energy Department in the late ’90s. It ran well, he said, but natural gas, a competing fuel, collapsed in price, and the state had few requirements for renewable power.

“There were not renewable portfolio standards,” Mr. Murphy said. “Nobody cared about global warming, and we weren’t killing people in Iraq.”

Another great way to store electricity is to convert it into compressed air. While it's not as efficient as the molten salt method of storing solar heat, it works with every single form of renewable electricity generation.

Basically, excess electricity produced when the sun is shining or the wind is blowing is used to run an air compressor. Air is compressed in giant underground caverns excavated specifically for the purpose of holding this air. This is no problem because that's already how we store pressurized natural gas. During the night or when the wind isn't blowing, the air is released to run a turbine generator to make power for the grid.

We don't need a technology breakthrough. We need to have the balls to use what we've got right now.

I just heard of the sand and/or water method of holding heat. Seems neat. The compressed air technique sounds really good too.

But do we have the balls...?

We have the balls, all that is needed is that "Oh Shit" moment that grabs the attention of Joe Sixpack. And apparently, the prospect of $4 gas is not enough.

Unfortunately, that "oh shit" moment may well only come at the very end of our current society. If they literally wait until there's not enough gas to fill their tank or we can't afford to grow enough food, we're screwed.

From Bloomberg

Boone Pickens Adopts Long Position on Oil Investments (Update2)

By Daniel Whitten

April 17 (Bloomberg) -- Boone Pickens, a billionaire energy investor, said he reversed course and adopted a long position on oil, meaning he is betting the price of crude will rise.

Pickens, 79, the founder and chairman of Dallas-based BP Capital LLC, said today in a speech at Georgetown University that the price of crude oil will only continue to climb and demand will eventually be dampened.

``The position is long, not short,'' Pickens told reporters after his speech. ``I covered the short position, it was a mistake on my part. We missed.''

Crude oil futures in New York touched $115.54 a barrel today, the highest intraday price since trading began in 1983.

Pickens said he thought oil was approaching $125 a barrel. Oil will eventually reach $150 per barrel, he said while cautioning ``I won't be investing in $150 oil.''

World oil supplies won't exceed 85 million barrels a day because of high depletion rates of existing wells, he said in his speech.

``There is only 85 million barrels of oil globally in the market coming a day and I don't think you can increase that 85 million,'' Pickens said.

World oil demand during the four years ending 2008 is rising at an average annualized pace of about 1.4 percent, according to International Energy Agency forecasts.

OPEC Reluctance

Over the same period, non-OPEC oil supply is seen climbing at a slower pace of 0.9 percent. The Organization of Petroleum Exporting Countries has this year been reluctant to commit to pumping more, saying supply and demand are in balance.

Pickens endorsed Republican presidential candidate John McCain, while criticizing his energy policies. Recent McCain proposals to stop putting oil into the federal Strategic Petroleum Reserve and to suspend a gasoline tax for the summer wouldn't be good for the country, Pickens said.

``I'm hoping he will become better informed and come up with better ideas about energy than he has up to now,'' he said.

He plans to invest $10 billion in 4,000 megawatts of wind projects within the next several years.

``We are going to put a lot of money into wind next month,'' Pickens said, adding he expects at least a 25 percent return on his investment.

All bolding is mine.

How New Energy Order Will Dramatically Change our Daily Lives

Link

By Michael T. Klare, Tomdispatch.com. Posted April 16, 2008.

Get ready for a new world order in which energy will govern what we eat, where we live, and if and when we travel.

It's strange that the business and geopolitics of energy takes up so little space on American front pages -- or that we could conduct an oil war in Iraq with hardly a mention of the words "oil" and "war" in the same paragraph in those same papers over the years. Strange indeed. And yet, oil rules our world and energy lies behind so many of the headlines that might seem to be about other matters entirely.

Take the food riots now spreading across the planet because the prices of staples are soaring, while stocks of basics are falling. In the last year, wheat (think flour) has risen by 130 percent, rice by 74 percent, soya by 87 percent, and corn by 31 percent, while there are now only eight to 12 weeks of cereal stocks left globally. Governments across the planetary map are shuddering. This is a fast growing horror story and, though the cry in the streets of Cairo and Port au Prince might be for bread, this, too, turns out to be a tale largely ruled by energy: Too many acres turned over to corn (and sugar cane) for the creation of biofuels; a historic drought in Australia and other climate-change-induced extremes of weather -- a result of the burning of fossil fuels -- that have affected crop yields; and many new middle-class consumers, in China and elsewhere, coming on line, with a growing desire for meat, the production of which is heavily petroleum based.

From resource wars to oil wars (the subjects of his last two books), Michael Klare, Tomdispatch's energy expert, has long been ahead of the curve when it came to ways in which our planet was being reshaped at the most basic level. Today, he offers Tomdispatch readers a peek into some of the key themes in his staggering new book, Rising Powers, Shrinking Planet: The New Geopolitics of Energy. If you want to grasp the true shape of our shaky world, of where exactly we've been and where we might be going, this is a book not to be missed. It offers the profile-in-formation of a shape-shifting planet, a planet in transition and on a road to nowhere pretty. Check out as well, the latest Tomdispatch brief video (produced by TD's Brett Story) -- in which Klare discusses key issues in his new book -- by clicking here. Introduction written by TomDispatch editor Tom Engelhardt.

The End of the World as You Know It
...and the Rise of the New Energy World Order
By Michael T. Klare

Oil at $110 a barrel. Gasoline at $3.35 (or more) per gallon. Diesel fuel at $4 per gallon. Independent truckers forced off the road. Home heating oil rising to unconscionable price levels. Jet fuel so expensive that three low-cost airlines stopped flying in the past few weeks. This is just a taste of the latest energy news, signaling a profound change in how all of us, in this country and around the world, are going to live -- trends that, so far as anyone can predict, will only become more pronounced as energy supplies dwindle and the global struggle over their allocation intensifies.

Energy of all sorts was once hugely abundant, making possible the worldwide economic expansion of the past six decades. This expansion benefited the United States above all -- along with its "First World" allies in Europe and the Pacific. Recently, however, a select group of former "Third World" countries -- China and India in particular -- have sought to participate in this energy bonanza by industrializing their economies and selling a wide range of goods to international markets. This, in turn, has led to an unprecedented spurt in global energy consumption -- a 47 percent rise in the past 20 years alone, according to the U.S. Department of Energy (DoE).

An increase of this sort would not be a matter of deep anxiety if the world's primary energy suppliers were capable of producing the needed additional fuels. Instead, we face a frightening reality: a marked slowdown in the expansion of global energy supplies just as demand rises precipitously. These supplies are not exactly disappearing -- though that will occur sooner or later -- but they are not growing fast enough to satisfy soaring global demand.
The combination of rising demand, the emergence of powerful new energy consumers, and the contraction of the global energy supply is demolishing the energy-abundant world we are familiar with and creating in its place a new world order. Think of it as: rising powers/shrinking planet.

This new world order will be characterized by fierce international competition for dwindling stocks of oil, natural gas, coal, and uranium, as well as by a tidal shift in power and wealth from energy-deficit states like China, Japan, and the United States to energy-surplus states like Russia, Saudi Arabia, and Venezuela. In the process, the lives of everyone will be affected in one way or another -- with poor and middle-class consumers in the energy-deficit states experiencing the harshest effects. That's most of us and our children, in case you hadn't quite taken it in.

Here, in a nutshell, are five key forces in this new world order which will change our planet:

1. Intense competition between older and newer economic powers for available supplies of energy: Until very recently, the mature industrial powers of Europe, Asia, and North America consumed the lion's share of energy and left the dregs for the developing world. As recently as 1990, the members of the Organization of Economic Cooperation and Development (OECD), the club of the world's richest nations, consumed approximately 57 percent of world energy; the Soviet Union/Warsaw Pact bloc, 14 percent percent; and only 29 percent was left to the developing world. But that ratio is changing: With strong economic growth in the developing countries, a greater proportion of the world's energy is being consumed by them. By 2010, the developing world's share of energy use is expected to reach 40 percent and, if current trends persist, 47 percent by 2030.

China plays a critical role in all this. The Chinese alone are projected to consume 17 percent of world energy by 2015, and 20 percent by 2025 -- by which time, if trend lines continue, it will have overtaken the United States as the world's leading energy consumer. India, which, in 2004, accounted for 3.4 percent of world energy use, is projected to reach 4.4 percent percent by 2025, while consumption in other rapidly industrializing nations like Brazil, Indonesia, Malaysia, Thailand, and Turkey is expected to grow as well.

These rising economic dynamos will have to compete with the mature economic powers for access to remaining untapped reserves of exportable energy -- in many cases, bought up long ago by the private energy firms of the mature powers like Exxon Mobil, Chevron, BP, Total of France, and Royal Dutch Shell. Of necessity, the new contenders have developed a potent strategy for competing with the Western "majors": they've created state-owned companies of their own and fashioned strategic alliances with the national oil companies that now control oil and gas reserves in many of the major energy-producing nations.

China's Sinopec, for example, has established a strategic alliance with Saudi Aramco, the nationalized giant once owned by Chevron and Exxon Mobil, to explore for natural gas in Saudi Arabia and market Saudi crude oil in China. Likewise, the China National Petroleum Corporation (CNPC) will collaborate with Gazprom, the massive state-controlled Russian natural gas monopoly, to build pipelines and deliver Russian gas to China. Several of these state-owned firms, including CNPC and India's Oil and Natural Gas Corporation, are now set to collaborate with Petróleos de Venezuela S.A. in developing the extra-heavy crude of the Orinoco belt once controlled by Chevron. In this new stage of energy competition, the advantages long enjoyed by Western energy majors has been eroded by vigorous, state-backed upstarts from the developing world.

2. The insufficiency of primary energy supplies: The capacity of the global energy industry to satisfy demand is shrinking. By all accounts, the global supply of oil will expand for perhaps another half-decade before reaching a peak and beginning to decline, while supplies of natural gas, coal, and uranium will probably grow for another decade or two before peaking and commencing their own inevitable declines. In the meantime, global supplies of these existing fuels will prove incapable of reaching the elevated levels demanded.

Take oil. The U.S. Department of Energy claims that world oil demand, expected to reach 117.6 million barrels per day in 2030, will be matched by a supply that -- miracle of miracles -- will hit exactly 117.7 million barrels (including petroleum liquids derived from allied substances like natural gas and Canadian tar sands) at the same time. Most energy professionals, however, consider this estimate highly unrealistic. "One hundred million barrels is now in my view an optimistic case," the CEO of Total, Christophe de Margerie, typically told a London oil conference in October 2007. "It is not my view; it is the industry view, or the view of those who like to speak clearly, honestly, and [are] not just trying to please people."

Similarly, the authors of the Medium-Term Oil Market Report, published in July 2007 by the International Energy Agency, an affiliate of the OECD, concluded that world oil output might hit 96 million barrels per day by 2012, but was unlikely to go much beyond that as a dearth of new discoveries made future growth impossible.

Daily business-page headlines point to a vortex of clashing trends: worldwide demand will continue to grow as hundred of millions of newly-affluent Chinese and Indian consumers line up to purchase their first automobile (some selling for as little as $2,500); key older "elephant" oil fields like Ghawar in Saudi Arabia and Canterell in Mexico are already in decline or expected to be so soon; and the rate of new oil-field discoveries plunges year after year. So expect global energy shortages and high prices to be a constant source of hardship.

3. The painfully slow development of energy alternatives: It has long been evident to policymakers that new sources of energy are desperately needed to compensate for the eventual disappearance of existing fuels as well as to slow the buildup of climate-changing "greenhouse gases" in the atmosphere. In fact, wind and solar power have gained significant footholds in some parts of the world. A number of other innovative energy solutions have already been developed and even tested out in university and corporate laboratories. But these alternatives, which now contribute only a tiny percentage of the world's net fuel supply, are simply not being developed fast enough to avert the multifaceted global energy catastrophe that lies ahead.

According to the U.S. Department of Energy, renewable fuels, including wind, solar, and hydropower (along with "traditional" fuels like firewood and dung), supplied but 7.4 percent of global energy in 2004; biofuels added another 0.3 percent. Meanwhile, fossil fuels -- oil, coal, and natural gas -- supplied 86 percent percent of world energy, nuclear power another 6 percent. Based on current rates of development and investment, the DoE offers the following dismal projection: In 2030, fossil fuels will still account for exactly the same share of world energy as in 2004. The expected increase in renewables and biofuels is so slight -- a mere 8.1 percent -- as to be virtually meaningless.

In global warming terms, the implications are nothing short of catastrophic: Rising reliance on coal (especially in China, India, and the United States) means that global emissions of carbon dioxide are projected to rise by 59 percent over the next quarter-century, from 26.9 billion metric tons to 42.9 billion tons. The meaning of this is simple. If these figures hold, there is no hope of averting the worst effects of climate change.

When it comes to global energy supplies, the implications are nearly as dire. To meet soaring energy demand, we would need a massive influx of alternative fuels, which would mean equally massive investment -- in the trillions of dollars -- to ensure that the newest possibilities move rapidly from laboratory to full-scale commercial production; but that, sad to say, is not in the cards. Instead, the major energy firms (backed by lavish U.S. government subsidies and tax breaks) are putting their mega-windfall profits from rising energy prices into vastly expensive (and environmentally questionable) schemes to extract oil and gas from Alaska and the Arctic, or to drill in the deep and difficult waters of the Gulf of Mexico and the Atlantic Ocean. The result? A few more barrels of oil or cubic feet of natural gas at exorbitant prices (with accompanying ecological damage), while non-petroleum alternatives limp along pitifully.

4. A steady migration of power and wealth from energy-deficit to energy-surplus nations: There are few countries -- perhaps a dozen altogether -- with enough oil, gas, coal, and uranium (or some combination thereof) to meet their own energy needs and provide significant surpluses for export. Not surprisingly, such states will be able to extract increasingly beneficial terms from the much wider pool of energy-deficit nations dependent on them for vital supplies of energy. These terms, primarily of a financial nature, will result in growing mountains of petrodollars being accumulated by the leading oil producers, but will also include political and military concessions.

In the case of oil and natural gas, the major energy-surplus states can be counted on two hands. Ten oil-rich states possess 82.2 percent of the world's proven reserves. In order of importance, they are: Saudi Arabia, Iran, Iraq, Kuwait, the United Arab Emirates, Venezuela, Russia, Libya, Kazakhstan, and Nigeria. The possession of natural gas is even more concentrated. Three countries -- Russia, Iran, and Qatar -- harbor an astonishing 55.8 percent of the world supply. All of these countries are in an enviable position to cash in on the dramatic rise in global energy prices and to extract from potential customers whatever political concessions they deem important.

The transfer of wealth alone is already mind-boggling. The oil-exporting countries collected an estimated $970 billion from the importing countries in 2006, and the take for 2007, when finally calculated, is expected to be far higher. A substantial fraction of these dollars, yen, and euros have been deposited in "sovereign-wealth funds" (SWFs), giant investment accounts owned by the oil states and deployed for the acquisition of valuable assets around the world. In recent months, the Persian Gulf SWFs have been taking advantage of the financial crisis in the United States to purchase large stakes in strategic sectors of its economy. In November 2007, for example, the Abu Dhabi Investment Authority (ADIA) acquired a $7.5 billion stake in Citigroup, America's largest bank holding company; in January, Citigroup sold an even larger share, worth $12.5 billion, to the Kuwait Investment Authority (KIA) and several other Middle Eastern investors, including Prince Walid bin Talal of Saudi Arabia. The managers of ADIA and KIA insist that they do not intend to use their newly-acquired stakes in Citigroup and other U.S. banks and corporations to influence U.S. economic or foreign policy, but it is hard to imagine that a financial shift of this magnitude, which can only gain momentum in the decades ahead, will not translate into some form of political leverage.

In the case of Russia, which has risen from the ashes of the Soviet Union as the world's first energy superpower, it already has. Russia is now the world's leading supplier of natural gas, the second largest supplier of oil, and a major producer of coal and uranium. Though many of these assets were briefly privatized during the reign of Boris Yeltsin, President Vladimir Putin has brought most of them back under state control -- in some cases, by exceedingly questionable legal means. He then used these assets in campaigns to bribe or coerce former Soviet republics on Russia's periphery reliant on it for the bulk of their oil and gas supplies. European Union countries have sometimes expressed dismay at Putin's tactics, but they, too, are dependent on Russian energy supplies, and so have learned to mute their protests to accommodate growing Russian power in Eurasia. Consider Russia a model for the new energy world order.

5. A Growing Risk of Conflict: Throughout history, major shifts in power have normally been accompanied by violence -- in some cases, protracted violent upheavals. Either states at the pinnacle of power have struggled to prevent the loss of their privileged status, or challengers have fought to topple those at the top of the heap. Will that happen now? Will energy-deficit states launch campaigns to wrest the oil and gas reserves of surplus states from their control -- the Bush administration's war in Iraq might already be thought of as one such attempt -- or to eliminate competitors among their deficit-state rivals?

The high costs and risks of modern warfare are well known and there is a widespread perception that energy problems can best be solved through economic means, not military ones. Nevertheless, the major powers are employing military means in their efforts to gain advantage in the global struggle for energy, and no one should be deluded on the subject. These endeavors could easily enough lead to unintended escalation and conflict.

One conspicuous use of military means in the pursuit of energy is obviously the regular transfer of arms and military-support services by the major energy-importing states to their principal suppliers. Both the United States and China, for example, have stepped up their deliveries of arms and equipment to oil-producing states like Angola, Nigeria, and Sudan in Africa and, in the Caspian Sea basin, Azerbaijan, Kazakhstan, and Kyrgyzstan. The United States has placed particular emphasis on suppressing the armed insurgency in the vital Niger Delta region of Nigeria, where most of the country's oil is produced; Beijing has emphasized arms aid to Sudan, where Chinese-led oil operations are threatened by insurgencies in both the South and Darfur.

Russia is also using arms transfers as an instrument in its efforts to gain influence in the major oil- and gas-producing regions of the Caspian Sea basin and the Persian Gulf. Its urge is not to procure energy for its own use, but to dominate the flow of energy to others. In particular, Moscow seeks a monopoly on the transportation of Central Asian gas to Europe via Gazprom's vast pipeline network; it also wants to tap into Iran's mammoth gas fields, further cementing Russia's control over the trade in natural gas.

The danger, of course, is that such endeavors, multiplied over time, will provoke regional arms races, exacerbate regional tensions, and increase the danger of great-power involvement in any local conflicts that erupt. History has all too many examples of such miscalculations leading to wars that spiral out of control. Think of the years leading up to World War I. In fact, Central Asia and the Caspian today, with their multiple ethnic disorders and great-power rivalries, bear more than a glancing resemblance to the Balkans in the years leading up to 1914.

What this adds up to is simple and sobering: the end of the world as you've known it. In the new, energy-centric world we have all now entered, the price of oil will dominate our lives and power will reside in the hands of those who control its global distribution.

In this new world order, energy will govern our lives in new ways and on a daily basis. It will determine when, and for what purposes, we use our cars; how high (or low) we turn our thermostats; when, where, or even if, we travel; increasingly, what foods we eat (given that the price of producing and distributing many meats and vegetables is profoundly affected by the cost of oil or the allure of growing corn for ethanol); for some of us, where to live; for others, what businesses we engage in; for all of us, when and under what circumstances we go to war or avoid foreign entanglements that could end in war.

This leads to a final observation: The most pressing decision facing the next president and Congress may be how best to accelerate the transition from a fossil-fuel-based energy system to a system based on climate-friendly energy alternatives.

All bolding mine

What lies beneath

The Economist

Apr 16th 2008
From Economist.com
Is there really an ocean of oil off Brazil?

Shutterstock

JUST how much oil is there off the coast of Brazil? Until recently, Brazil’s oil reserves were thought to be relatively modest: about 12 billion barrels at the beginning of 2007, according to BP, or about 1% of the world’s total. But last year, Petrobras, Brazil’s partly state-owned oil firm, announced the world’s biggest oil discovery since 2000: the Tupi field, which it hopes will produce between 5 billion and 8 billion barrels. Now the head of Brazil’s National Petroleum Agency (ANP) says another nearby discovery might hold as much as 33 billion barrels, which would make it the third-largest field ever found. That alone would be enough to raise Brazil to eighth position in the global oil rankings—and there is talk of further big discoveries. But the peculiar way in which the information came to light is casting doubt on its significance.

The ANP, which regulates the oil industry in Brazil, was quick to distance itself from the remarks of its boss, Haroldo Lima. His comments were of a personal nature, it said, and were based on past reports in the media. It helpfully cited an article from a magazine, World Oil, that had mentioned the magic figure of 33 billion barrels in February. Petrobras and its partners in the field, BG of Britain and Repsol-YPF of Spain, said that they had not yet done enough tests to determine exactly how much oil it contained.

But no one dismissed the estimate as preposterous. That, plus the fact that a senior official had given any credence to such a dramatic number, caused the share prices of the three firms to jump, despite the fact that Mr Lima claims he does not even know where the stockmarket is, and certainly did not intend to influence it. At one point Repsol’s was up by 14%. The shares of Hess, an American firm which is part of a consortium looking for oil nearby, posted their biggest gain since 1981.

Both Tupi and the field mentioned by Mr Lima, Carioca-Sugar Loaf, lie far below the seabed, beneath a thick layer of salt that is some 800km long and 200km wide. José Sérgio Gabrielli, Petrobras’s boss, has hinted that there are vast reserves of oil to be found in this “pre-salt” formation. At any rate, Petrobras has struck oil every time it has drilled there. It is currently assessing the reserves of yet another nearby discovery, Jupiter, which appears to be very similar in scale to Tupi. The firm’s head of exploration says “there is practically no exploratory risk” in the area. While this does not necessarily transform Brazil into an oil power on a par with Venezuela or Saudi Arabia, as Dilma Rousseff, the chairman of Petrobras’s board and chief of staff to Brazil’s president, has excitedly proclaimed, it suggests that the volumes of oil involved are very big.

Nonetheless, the immediate impact of the “pre-salt” discoveries will be small. It will be several years at least before any of the new oil comes to market. What is more, it will be expensive to produce. The fields are all far out at sea, deep under ground that is itself far below sea level. Simply drilling the first test well at Tupi cost $240m, and costs are likely to rise, thanks to fierce inflation throughout the oil industry. As if to underscore the point, the oil price hit a new record, of $114.41 a barrel, a couple of days after Mr Lima dropped his bombshell.

Even if there is an ocean of oil off Brazil’s coast, it will not necessarily be of much benefit to big oil firms, which have struggled to gain access to promising territory for exploration of late, thanks to growing nationalism in oil-rich countries. Brazil had been a heartening exception. But after Petrobras announced the discovery at Tupi, the ANP cancelled a planned auction of rights to explore for oil in several adjacent areas. Mr Gabrielli, the boss of Petrobras, says that the state’s relatively low share of the revenues from oil production in Brazil should be increased to reflect the decreasing risks and increasing profitability of exploration.

The discoveries do suggest that the gloomiest pundits are wrong to predict that the world will soon run out of oil. It is not that there are still lots of huge oil fields out there: the number of mammoth discoveries is declining, Tupi (and perhaps Carioca-Sugar Loaf and Jupiter) notwithstanding. But the new finds do illustrate how the technology with which oil firms hunt for, extract and process fossil fuels is constantly improving. Petrobras’s recent success is only possible thanks to recent advancements in seismic surveys, drilling, and offshore platforms. Other technological developments are allowing a greater proportion of the oil found around the world to be recovered and are even expanding the definition of oil, as firms conjure liquid fuel from the solid tar-sands of Canada, for example, or from coal and natural gas. Indeed, among the shares that rose in the wake of Mr Lima’s comments were those of the firms that supply Petrobras with all its clever kit.

If these are the consequences of peak oil in America - people actually having to think about what they buy and the lifestylce choices they make - then we not only got out lucky, we got out better than where we started.

Our next President hasn't shown evne the slightest incling that they might know what's going on. They're too busy playing class warfare to get elected.

If they actually knew what was about to happen, we would see an energy plan with some teeth, like a mandated doubling of the total combines output of all fossil-fuel-free energy sourses. Imagine how quickly we could end this problem if every year the output of solar, wind, nuclear, geothermal, and tidal doubled the previous year.

What do you know about tidal energy? When I first heard about it I was very excited, but I've read that it is a rather limited energy source for the US due to limited areas where it can be used effectively.

Is it a matter of funding better tidal research to improve efficiency, or is it simply going to be one of the smaller pieces of the puzzle?

This line shows that there is still very little understanding of what peak oil is. We're not going to run out of oil. We'll still be able to pump it out of the ground 500 years from now.

What is happening is that we've gotten all the oil that's easy to extract. And we can't make up for the decline in these easy to develop fields with smaller discoveries in harder to produce areas. We've reached a peak in oil production. And since the world economy is built on increasing access to cheap oil, the world economy collapses when the cheap oil is gone.

We're there now.

This is exactly the sort of thing you see in most media reports. He mentions:

Nonetheless, the immediate impact of the “pre-salt” discoveries will be small. It will be several years at least before any of the new oil comes to market. What is more, it will be expensive to produce. The fields are all far out at sea, deep under ground that is itself far below sea level. Simply drilling the first test well at Tupi cost $240m, and costs are likely to rise, thanks to fierce inflation throughout the oil industry. As if to underscore the point, the oil price hit a new record, of $114.41 a barrel, a couple of days after Mr Lima dropped his bombshell.

but never quite ties that to the "gloomiest pundits," who like you say, don't contend that we will run out of oil.

It's going to be a small part. The areas where it's best suited are in places that have high tidal shifts and some channel to focus the tidal waters through.

The PNW has some great tidal power areas because we have huge tidal fluctuations and the San Juan islands channel that flow into concentrated areas as it leaves Puget Sound.

In this case, you simply have turbines on the ocean's floor that capture the water flowing by just like a wind turbine does with wind. Except the tide is nearly always either coming in or going out, so you're nearly always making power.

An idea that has more widesrpead promise is wave power. There are several designs that take advantage of waves to make power.

Either way, they could both be a piece of the puzzle. But solar, wind, and nuclear are the big dogs. Just the Mojave desert has enough solar potential to power the entire country. Just Montana, Colorado, North and South Dakota, Iowa, and Texas have enough developable wind to power the entire country. Add in nuclear and we'd be home free in less than a decade.

I've heard the problem with nuclear is a Uranium Peak.

With breeder reactors that's litterally over a thousand years away. Even with a combination of regular fission reactors and breeder reactors, we could ramp up nuclear for the next few hundred years before we even dented our uranium supply.

I'm a huge fan of nuclear. It's clean, reliable, and carbon free.

If I were given free reign to direct our energy policy, we'd have a baseline of nuclear capacity that could smooth the renewables from solar and wind. The backbone of our energy would be solar from the sun belt from California all the way to Florida. that would give us nearly 18 hours of sun shining on our collectors every day from dawn in Florida to dusk in California. We'd store the excess capacity in either melted salts to boil water to turn turbines at night, or in underground caverns as compressed air to turn turbines at night.

We'd get our wind from the midwest and the coasts. The extra capacity would be stored as compressed air just like from solar.

By 2020 we could be off of foreign energy. Shortly thereafter we could be fossil fuel free.

And you're not concerned about the long term consequences of nuclear waste? I know we supposedly have built storage facilities that can hold the stuff for thousands of years, but it's not like they've had thousands of years to test them. I guess I just worry about another "It's not our problem, let future generations worry about it" sort of thing.

Nuclear doesn't scare me at all. If we have to, we can simply send it into space and nudge it toward the sun. Problem solved.

Current nuclear waste transport containers could probably withstand an explosion on the space shuttle.

The only real probelm with nuclear is security. A terroist bomb at a solar tower only knocks out production for a little while. A bomb at a nuclear plant could cause a radiation leak.