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To stir people into action on peak oil issues in the Capital District
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What is peak oil?
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See the links below, for the Energy Bulletin, Oil Drum, ASPO and Life after the Oil Crash, for several excellent primers on peak oil. Here’s a brief description. Peak oil is the point at which the world produces the maximum amount of oil. Once we’re past that point, oil production, on the global level, begins a slow (we hope!) decline. There will still be lots of oil in the world at that point, but it will get increasingly expensive to pump it. In other words, the age of cheap oil will be over.
So when will peak oil occur? No one knows for sure. The most optimistic forecasts (usually from economists) say we have a 25-30 year supply. The market will somehow provide an energy alternative and society will painlessly transition to the new energy source. Notice that the economists don’t talk about peak oil and, in fact, it’s implied that the reason society will switch to a new energy source is because of increasing cost. Of course, without massive efforts to develop new energy sources now, that transition will be anything but painless.
The oil companies provide a more sobering assessment. In the Corporate Citizenship 2004 Report, ExxonMobil projects that production from non-OPEC countries will peak within 10 years. ExxonMobil assumes that OPEC countries can increase production by an additional 1 million barrels per day every year to make up that shortfall. And just so you don’t think natural gas is the answer to our problems, Canadian and U.S. natural gas production has already peaked. In the 2005 BP Statistical Review of World Energy, BP estimates that North America has a 10 year supply at current production rates. Natural gas is not easily transported between continents- it has to be cooled into liquefied natural gas (LNG), carried in special tankers and unloaded at special port facilities. Read $$$ for this option.
The most alarming estimates for global oil production, however, come from a few analysts that have looked carefully at the numbers. They think the peak of global oil production is imminent. Colin Campbell, a petroleum geologist, has been preaching this sermon for years. A more recent convert is Matthew Simmons, an oil industry analyst, who has written “Twilight in the Desert”. In it he casts serious doubt on just how much oil Saudi Arabia has left. This point is important because other oil producing countries are already producing at capacity. Saudi Arabia has long been considered to be the country that can produce more oil at will. If Saudi Arabia, in fact, has less oil than believed, we’re looking at serious shortages.
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How will the end of cheap oil affect you?
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Our entire society is built on cheap oil. Check out James Howard Kunstler’s (author of “The Long Emergency”) article in Rolling Stone for a provocative (but very depressing) discussion of some of the consequences of expensive fuel. Richard Heinberg's Letter From the Future (see below) gives another possible scenario.
Think about the impact of gasoline at $10-20/gallon. Commuting to work from that house in the ‘burbs becomes a major expense. And maybe that house will be worth a lot less than you paid for it when people decide they’d rather live closer to their jobs. We’re already seeing plunging resale values for gas guzzlers. Expensive diesel will also eat up a huge piece of suburban school budgets, so expect higher property taxes. Transportation costs for all facets of local and state government (police, fire, social services, administration) will also rise dramatically. Again, the end result is increasing property and income taxes.
Our economy depends on cheap oil. With expensive gasoline and diesel, shipping costs are no longer a minor cost of doing business. Look for higher prices on the imported merchandise at Wal-Mart. Have you ever noticed how few items sold at the supermarket are actually grown near you? Expensive diesel means higher prices at the supermarket. Worse, scarce diesel means empty shelves.
[Here’s a silver lining: high transportation costs mean local merchandise, whether grown on local farms or manufactured in local factories, will be more competitive.]
On a wider level, the end of cheap oil means the end of cheap air fares and rising mass transit fares. Here in the Northeast, heating is also a major concern. Expect skyrocketing costs to keep your house warm. Currently about 6% of the nation’s power plants are powered by oil and another 13% (mostly newer plants) are fueled by natural gas, so rising electricity prices are likely.
One of the biggest concerns is food. Current farming practices consume massive quantities of oil and natural gas in the form of fuel for machinery, feedstock to make fertilizer, pesticides and herbicides, and then fuel for shipping.
And then there’s a huge list of things made from oil or natural gas- everything from paint to plastics to tires.
[Another silver lining- this peak oil business should take care of that whole global warming thing.]
So what can we do? Capital District Energy Action is not interested in your money. Instead we want something much more valuable- your time, your energy, your imagination. We’re focusing our efforts at the state and local level (lucky us- the state government is right here!) because, let’s face it, the feds aren’t going to be much help.
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