Mass. Hitchhikers plan to get on the road

AP

October 30, 2005

Energy concerns central to effort

NORTHAMPTON -- She's been called the Walking Quaker, an 86-year-old pacifist pedestrian who embodies much of this college town's sense of grass-roots activism and liberal politics that never escape at least the whiff of beat or hippie influence.

And as Frances Crowe and a group of like-minded residents predict a future threatened by major oil shortages, they're reviving and modifying a one-time popular mode of transportation with the hope it might help prevent an energy crisis: hitchhiking.

''When I came to Northampton in 1951, I had a station wagon and picked up all kinds of hitchhikers," Crowe said. Six years later, Jack Kerouac's ''On the Road" was published, and thousands of Americans sought to emulate the writer's cross-country hitchhiking adventures.
''Hitchhiking isn't as common as it was then," Crowe said. ''But with the price of oil going up, people might want to think about changing their habits."

Carpooling and ride-sharing certainly aren't new ideas. But Crowe's group -- which calls itself Communi-GO -- is trying to offer a more flexible transit system to college students, poor people, and anyone else who may not have a car or the desire to drive themselves throughout the Pioneer Valley, the stretch of Western Massachusetts that follows Interstate 91 between the Connecticut and Vermont borders.

''It makes sense that people are looking to hitchhike as a new way of carpooling," said Morgan Strube, a longtime hitchhiker who maintains www.digihitch.com, a hitchhiking information website. ''It's informal, and it could be pretty fun."

Strube traces the roots of hitchhiking to the turn of the last century, when he said people looking for adventure ''realized there are cars out there that will stop and give me a ride." By the 1920s, hitchhikers were mostly young job-seekers looking for cheap and easy ways to commute from rural areas into large cities, he said.

That's the basic premise behind Communi-GO. The group's idea sprang from a discussion of ''peak oil," a concept that the world's oil supply is shrinking at a rate that will never be able to satisfy growing energy demands.

''We're trying to take some concrete steps to address the problems of peak oil," said Molly Hale, one of the Communi-GO organizers.

Similar efforts have been made in the San Francisco and Washington, D.C., areas where impromptu carpooling systems have been set up along highways and heavily traveled roads.
The Pioneer Valley program is still in planning stages, and the group needs to answer questions about safety, liability, and how to screen potential drivers and riders. They figure 300 people will have to sign up before Communi-GO can, well, get up and go.

''We should keep emphasizing that this is an all-volunteer organization," Hale said at a recent planning meeting. ''People should know what they're getting into."

Participants will be issued placards identifying them as Communi-GO members. Instead of holding out a thumb to flag a ride, a hitchhiker would wave the sign. When a car pulls over, the driver would display a placard as proof of membership.
There wouldn't be any scheduled routes or pickup times, but organizers expect groups of riders and passengers will develop routines that make it easier to predict where and when a lift will come.
To enroll in the program, people would have to submit their names and addresses and fill out a form stating they have no history of violent crimes. Those who have been convicted of drunken driving would be allowed to take part as passengers, but not as drivers.

People who want to be drivers would have to give proof of insurance, registration, and a valid license.

It'll be strictly an honor system when it comes to trusting the criminal histories of riders and drivers. But Northampton Police Chief Russell Sienkiewicz said having everyone's name in a database will at least give police some basic information in case of foul play.

''It's not airtight security, but what is these days?" he said. ''They're trying to form a system that is better than just picking up strangers, and from a public safety point I don't see any problems. I think it's a great idea for cutting down the number of motor vehicles on the road and for conserving energy."

While they may be motivated by a desire to reduce oil consumption, Communi-GO's founders don't deny the social benefits that can come from hitchhiking.

Crowe has since traded her station wagon in for a 1998 Toyota Corolla that she drives only once a week to a Quaker meetinghouse about 20 miles away in Leverett. The rest of her commuting is done on foot or by hitching an occasional ride.

''Cars seem very alienating to me unless you've got someone to share the ride with," she said.

http://www.boston.com/news/local/
massachusetts/articles/2005/10/30/
mass_hitchhikers_plan_to_get_on_the_road/

Peak Oil Confusion and the World Economy

American Chronicle

By Thomas Dawson
October 18, 2005

What is a person to believe? Has oil production already peaked? Is Peak Oil another twenty years away? Or perhaps Peak Oil is a misunderstanding or even a hoax perpetrated by those controlling the oil supplies. Recent articles indicate that new or renewable sources are ready to save the day in any case. Everyone from the government to the wind generator manufacturers have their reasons to spin their points of view. New and conflicting points of view appear almost daily in the media and especially on the Internet.

Certainly the Iraq Invasion has contributed to the rising price of oil. Unfortunately, this occupation of Iraq has probably prematurely sparked a permanent increase in the price of oil. The same should not be said of the hurricanes in the Gulf. In a few months, the government tells us, the normal flow of oil should resume and prices should return to more reasonable levels. The Internet portion of the media is in doubt.

This desperate search for oil is not a misunderstanding and is certainly no hoax. Setting aside the proposed political excuses, we invaded Iraq to guarantee the continuation of the American Middle East oil supply. We are not only in Iraq; we intend to remain on the doorsteps of Iran and Saudi Arabia to protect our oil interests. China and India are scouring the world; especially South America and Africa to insure their oil supply. Oil companies are investing in expensive offshore and deep-water wells and looking to extract very expensive oil from coal, tar sands, and shale. Farmers around the world are raising crops with high vegetable oil content, hoping to cash in on the surge of bio-diesel fuels.

We have all felt the inflation over the past couple of years and now it has caught up with the particular kind of inflation that our government is inclined to measure. It is not just the hurricanes. The UK inflation rate for August was 2.4% and that was before the hurricanes. The UK inflation rate was 2.5% for September, only one tenth of one percent higher, but the highest in eight years and trending upwards. Greenspan has just indicated that the rising fuel costs would continue to be a drag on the global economic expansion from now on. It is easy to blame all this on oil prices, but the reality is that the western world is experiencing a very fragile economic crisis and oil prices are only one of many contributors to the problem, albeit an important one.

Some say that technology will save the day. Someone will make a breakthrough in hot fusion, or cold fusion, or hydrogen fuel. Others are looking to harness the movement of ocean waves and ocean tides. Although they are not yet cost effective, we see many hybrid automobiles. In certain places windmills have become marginally cost effective. The idea of nuclear plants has regained popularity. Coal plants are again being looked at seriously. Harnessing energy from the biological destruction of waste is not out of the question. There is no end to the possibilities. Sometime, in the not too distant future, many solutions and workarounds will be found

On the other hand, there are the purveyors of gloom and doom. We have a tendency to discount whatever they may say because we tend to think that inevitable progress is forever on our side. Let it be said that as much as we may not agree with them, they do have compelling reasons for their point of view. The supply of cheap liquid oil is no longer increasing and is no longer able to keep up with an ever-increasing demand. The western countries continue to consume more oil with each passing year. The vast populations of the Asian countries are now on the cusp of economic growth. As most of the world’s industrial output moves toward Asia, their success and the success of western investors are dependent on abundant energy supplies. With a growth of between 5% and 20% each year in their economy, these Asian countries will double their energy consumption very quickly and many times over.

Liquid oil is a finite commodity and when the rate of demand rises above the rate of production, some countries must go without fulfilling their needs. Prices will continue to spike up and down, but will not stay down for extended periods of time as they continue in an upward trend. With few exceptions, those who own oil will allow the price to ration it to the world. Some countries have already been priced out. These purveyors of doom and gloom point out that the world’s standard of living is diminished proportionally and permanently as the price of energy rises. This may well be true. Lifestyle changes will be forced upon the lower and middle classes. No one will contend the immediacy of this problem. It is also true that there are other, more destructive, environmental processes at work in a world of ever-rising population that must be resolved.

Has oil production peaked? Probably the light sweet variety has peaked in the last couple of years or is peaking now. Other heavier and sour types have probably not peaked and will not peak soon. Oil from tar sands is just in the infant stage. So what is the point of this brouhaha?

The point is that we have entered a period where energy costs will continue to rise for the foreseeable future unless there is a major breakthrough in an alternative cheap source. Currently there is no cheaper source of abundant energy than liquid crude oil. The extraction of other currently available sources is either not commercially feasible or more expensive as well as hazardous to the environment. In the long run, our government will not allow environmental considerations to stand in the way of the expansion of business and globalization.

There are plans now to use coal gasification and liquefaction in the United States to produce electricity. Countries around the world are considering nuclear plants. Shell oil is experimenting with extracting oil from shale. Like it or not, governments around the world are supporting any measures that will reduce the cost of energy. Unfortunately all of these last minute endeavors will take time. In many cases, substantial results of sufficiently useful volume may take five or ten or more years.

The major concern is that we may not have the time necessary to adjust to the increase in energy costs. Although many of the economies of the world are already experiencing a growth in inflation, the ripple effect of energy prices is just beginning to arrive at the consumer level in the United States. Many are upset with the increases in gasoline prices, but the increase in the cost of home heating and electricity has yet to be felt. Manufacturers and retailers, to ensure a good Christmas, will probably absorb much of the increased transportation costs of imported goods, but what then? Can the precarious asset bubble withstand an inflationary spiral that may last more than a couple of years? With a drop in consumer spending, how much can our service industries contract before unemployment begins to rise? How high does the interest rate climb before the financial sector begins another round of mergers, with the usual layoffs of extraneous employees? Protracted high prices for energy could well be the trigger that leads to a global recession in the near future.

http://www.americanchronicle.com/articles/viewArticle.asp?articleID=3037

What's peak oil? It's time to learn

Portland Tribune

By Robert Pace
October 28, 2005

Peak oil is an important concept, from the local level to globally, but few know the term.

That will change.

In a broad international sense, the term “peak oil” signifies a time when the finite amount of crude oil is unable to meet the growing demands of our world economy.

In other words, it’s the end of cheap energy.

Peak oil affected U.S. domestic crude discoveries around 1971.

That’s why we are so dependent on foreign sources. Access to those sources makes up the balance of our nation’s energy needs.

Some people believe “peak oil” soon will become a household term, while others think it’s a few years before it’s commonly understood. Still others claim a date even further out. Industry officials are all over the board about its timing. Regardless, it’s for real and will affect everyone probably sooner than later.

For instance, look at the current price of gas and ask yourself, “Why does it cost so much to fill up a gas tank?” Later this year, you may be saying something similar about heating your home. This is what happens when demand exceeds known reserves of anything.

Just as the conversion from the agricultural age to the industrial age had an impact on how our nation developed, peak oil likewise will be a huge factor in how our communities and governmental agencies do business in the future.

The advent of peak oil doesn’t mean we will run out of oil anytime soon. It does mean, though, that the possibility of finding large new reserves is unlikely. Our current reserves, still untapped, are minuscule in comparison to the daily per barrel usage of our international economy.

The term “peak oil” also may help you understand why the United States and other nations have a vested interest in maintaining access to Middle Eastern oil. The largest reserves of crude can be found there, and access to them is a strategic part of our economic system.

As long as we maintain our current levels of energy consumption and have no viable and price-comparable energy alternatives in place, the United States will require unimpeded access to the Middle East’s oil fields as well as to the natural gas fields north of Afghanistan.

Some people project that because of peak oil we will see a return to denser inner-city populations across the nation. It is economically advantageous and practical to move goods into central locations rather than trying to cover larger areas with many long-distance deliveries. Just about everything we touch had to be moved here by a truck or train. And those forms of transportation rely on oil for fuel.

Has the city you live in been increasing its housing density?

Ever wonder why inner-city property is becoming so expensive?

I recommend the movie “The End of Suburbia,” about how the American economy became more suburban-based and how the face of suburban life may look after the peak oil age becomes a reality.

At this point, I want to make our communities aware of the term “peak oil.” Preparation will help us transition into what will become known as the Peak Oil Age.

The Portland Peak Oil discussion group (portlandpeakoil.org) meets at 7 p.m. every Wednesday in the St. Francis Dining Hall on Southeast 11th Avenue at Pine Street. The group is open to the public.

http://www.portlandtribune.com/archview.cgi?id=32120

The Peak Oil Crisis: Waiting for Winter

Falls Church News-Press

By Tom Whipple
October 27, 2005

In the fourth quarter, worldwide demand for oil goes up by 2.5 million barrels per day over summer demand to keep the northern latitudes warm during the winter months. Given that we might have an unusually cold winter this year, the demand increase might be conservative.

The Chinese government recently announced their economy is going to grow another nine or ten percent this year. Maybe they have figured out how to grow without increasing their oil consumption. If they expect in keep this up, their oil imports should start increasing The US economy is still bouncing along fairly well with predictions of pretty good growth next year. More oil needed!

Although many of our flooded refineries are getting back into operation, about a million barrels per day of refining capacity has not yet recovered from the hurricanes. Two-thirds of our Gulf oil production is still shutdown and it’s beginning to look as if government predictions that all will be well in the Gulf by Christmas are optimistic. In Iraq , the insurgents continue to blow up oil pipes at a steady pace and it is only a matter of time before they figure out how to shut down production completely. The shipments of refined gasoline to the US from our fellow International Energy Agency members will soon be drawing to a close. The first signs of serious inflation are beginning to stir.

Despite all this bullish-for-oil news however, prices have dropped some 15 percent since the Katrina peak of over $70 dollars. Wall Street oil traders and analysts are starting to tell financial reporters that the hurricane dislocations are over for a while and the good times may roll for a while longer. Indeed earlier this week the Dow flew up 170 points on the idea that our oil problems no longer look as bad as they did a few weeks ago.

Where did all this optimism come from? Is it justified? The root cause, of course, is that the securities industry is based on eternal optimism and growth. Few have grasped, or are willing to admit, how close we are to the final oil crisis of all time.

The more immediate reasons for the spectacular price drop in the price of oil, and the price at our gas pumps, seems to be the lack of more production-damaging hurricanes and the perception that we Americans have slowed our driving in response to "expensive" gasoline.

After two months in which one hurricane after another has threatened or actually wiped out Gulf oil production and refining, any news that this is not about to happen in the immediate future drives oil traders to sell and sell some more.

Another reason for the price drop, however, is the "demand destruction" (a fancy term for "it costs too much so I am not going to buy as much) said to be taking place in the United States .

Last week the Department of Energy reported US demand for petroleum products had dropped by 2.3 percent as compared to 2004. The American Petroleum Institute did DOE one better by announcing that demand during September had dropped by nearly 4 percent. This was backed up by a consumer survey in which 69 percent claimed to be driving less.

There you have it. Economic theory worked. Higher gas prices have finally driven Mr. and Mrs. America to slow down, ride a bus now and them, or to simply stay at home and watch TV. Supply and demand will soon be back into balance and the crisis will be over for a while. There is no doubt some are cutting back on their driving, but how much and will it last enough to bring supply and demand back into balance without sharply higher prices?

That the US 's hurricane-disrupted crude production fell to less than 4 million barrels per day during September — the lowest since 1943 — does not seem to bother anybody. Just for the record, this means we are currently importing or withdrawing from our strategic reserve some 80 percent of our daily oil consumption.

Why didn't we fall flat on our backs with much of our crude production and significant pieces of our refinery production still out of service in the last six weeks? The answer is, our fellow members in the International Energy Agency (IEA) are letting us have an additional 800,000 barrels of gasoline per day out of their reserves. Moreover it seems our domestic refineries are still deferring maintenance and are still cranking out gasoline rather than switching over to more heating oil production at the end of the summer driving season. It is this combination that has kept us going.

The IEA, however, has already voted to stop letting us have world reserves beyond what was voted immediately after Katrina and the advent of colder weather will quickly force a choice between driving and staying warm.

On top of all this, some commentators are voicing concern that instead of reporting an actual reduction in demand, the government is really measuring a reduction in refinery output which, given all the flooded refineries, should be completely obvious.

The replacement for reduced gasoline production comes from local storage tanks and increased imports of foreign gasoline. In the current hurricane-induced dislocations in much of the US oil industry, one would suspect it is difficult for the government to accurately track just what is going on.

All this is saying it may be a touch too early to start celebrating the end of $3 gasoline. Even if the Caribbean is through generating hurricanes for the year, the world's supply/demand balance is very tight. So fill up your tank while prices are low and hold off on that new SUV for a while. It looks like a long harsh winter ahead and Katrina's second shoe has yet to drop.

http://www.fcnp.com/534/peakoil.htm

Peak Oil In Time Magazine: It's the End of Oil / Oil is Here to Stay

Time

By Kenneth Deffeyes, Peter Huber
October 31, 2005 (Published online on 10/23/05)

It's the End of Oil

World oil production is about to reach a peak and go into its final decline. For years, a handful of petroleum geologists, including me, have been predicting peak oil before 2007, but in an era of cheap oil, few people listened. Lately, several major oil companies seem to have got the message. One of Chevron's ads says the world is currently burning 2 bbl. of oil for every barrel of new oil discovered. ExxonMobil says 1987 was the last year that we found more oil worldwide than we burned. Shell reports that it will expand its Canadian oil-sands operations but elsewhere will focus on finding natural gas and not oil. It sounds as though Shell is kissing the oil business goodbye. M. King Hubbert, a geophysicist, correctly predicted in 1956 that oil production in the U.S. would peak in the early 1970s--the moment now known as "Hubbert's Peak." I believe world oil production is about to reach a similar peak.
Finding oil is like fishing in a pond. After several months, you notice that you are not catching as many fish. You could buy an expensive fly rod--new technology. Or you could decide that you have already caught most of the fish in the pond. Although increased oil prices (which ought to spur investment in oil production) and new technology help, they can't work magic. Recent discoveries are modest at best. The oil sands in Canada and Venezuela are extensive, but the Canadian operations to convert the deposits into transportable oil consume large amounts of natural gas, which is in short supply.
And technology cannot eliminate the difficulty Hubbert identified: the rate of producing oil depends on the fraction of oil that has not yet been produced. In other words, the fewer the fish in the pond, the harder it is to catch one. Peak production occurs at the halfway point. Based on the available data about new oil fields, there are 2,013 billion bbl. of total producible oil. Adding up the oil produced from the birth of the industry until today, we will reach the dreaded 1,006.5-billion-bbl. halfway mark late this year. For two years, I've been predicting that world oil production would reach its peak on Thanksgiving Day 2005. Today, with high oil prices pushing virtually all oil producers to pull up every barrel they can sweat out of the ground, I think it might happen even earlier.

Kenneth Deffeyes is the author of Beyond Oil (Farrar, Straus & Giroux; 224 pages)

Oil Is Here to Stay

The "Peak Oil" theory fits nicely on a cocktail napkin. Its curve looks like this: Colonel Edwin Drake starts pumping crude in Pennsylvania in 1859. We've been pumping faster and faster ever since. Sooner or later, on this finite planet of ours, it just has to run out. U.S. production peaked in the 1970s. Global production will soon be on the downside of the same dismal curve.
Nonsense. Technology and politics--not geology--determine how much we pump and what it costs.

America currently consumes about 7 billion bbl. of oil a year. When production in Persian Gulf fields was ramped up by 12 billion bbl. a year in the 1960s, global prices collapsed. That made it politically painless for the U.S. to ban almost all new drilling off the Florida and California coasts and then in much of Alaska. With oil, as with textiles, domestic production peaked because others began producing the same stuff cheaper, while we contrived to make our production more expensive. Today Alaska contains 18 billion bbl. of off-limits crude. We've embargoed at least an additional 30 billion bbl. beneath our coastal waters. And we could fuel many of our heavy trucks and delivery vehicles for a decade with the 20 billion bbl. worth of natural gas we've placed off limits in federal Rocky Mountain lands.
Outside our borders, Alberta's tar sands contain 180 billion bbl. recoverable with current technology, and Calgarians are pumping that oil today. A total of several trillion barrels of oil soak the sands of Canada and Venezuela alone--a century's worth at the current global rate of consumption. Then there are methane hydrates. The U.S contains some 30 trillion bbl. worth of those frozen hydrocarbons off the shores of Alaska, the continental coasts and under the Rockies. There's little doubt they too can be extracted economically. If we try, we'll certainly find cheap ways to transform North America's 1 trillion bbl. worth of coal into crude as well. General Patton's Third Army completed its roll across Europe on coal liquefied with German technology.The price of oil has always fluctuated. In inflation-adjusted dollars, it was higher in the early '80s than it is today. Extraction technologies continue to improve much faster than supply horizons recede. We've got the right know-how and the right planet. What we lack is the political will.

Peter Huber is the co-author, with Mark Mills, of The Bottomless Well (Basic Books; 214 pages)

http://www.time.com/time/magazine/article/0,9171,1122019-2,00.html

The Peak Oil Crisis: The North Atlantic Oscillation

Falls Church News-Presss

By Tom Whipple
October 20, 2005

Back in our school days, we all learned how the Gulf Stream sweeps out of the warm Caribbean , flows along our East Coast, and crosses the Atlantic where all that warm water keeps Northern Europe from turning into a giant glacier.

What our teachers didn't tell us, however, is there is a similar and even more potent phenomenon hovering between America and Europe known as the North Atlantic Oscillation (NAO). Every winter since the last Ice Age, a giant low-pressure area forms over Iceland and a giant high-pressure area over the Azores . The clockwise and counterclockwise circulation around this pair propels vast amounts of warm air out of the southern United States to northern Europe where it plays a major part in keeping the region habitable in the winter.

However, every few decades an unusual phenomenon happens. The pressure difference between the high and low weakens so much, only smaller quantities of America 's southern air are transported straight across the Atlantic towards the Mediterranean . Northern Europe suddenly becomes downright cold. One of the more famous occurrences of this phenomenon happened in the early 1940's when Hitler was invading Russia . Remember those pictures of German troops on the Eastern Front trying to survive 30 degrees below without the proper arctic gear? That was the North Atlantic Oscillation.

Now you may ask, what does all this climatology have to do with peak oil here in America ? The answer, unfortunately, may be more than you really wanted to know. When that big flow of slightly used American air is being sucked by New England on the way to old England , it serves to help block the frigid Canadian air that tries to float down onto the US during the winter. When the trans-Atlantic airflow is reduced our Northeast can get mighty cold too.

Last week, the London Times reported that her Majesty's government had called an emergency meeting of lots of important people. This meeting is to discuss what to do if the country runs out of heating fuel this winter. It seems the British long-range forecasters are now predicting there’s a 2 out of 3 chance the NAO will turn negative this winter and that Britain , and the rest of Northern Europe , will see lots of very cold weather. How harsh? When we had one of these negative oscillations back in the 1970's parts of Europe burned 30 percent more heating fuel to keep going.

Now you may recall that 40 years ago, the British along with the Norwegians discovered lots of oil and gas in the North Sea . Being sensible folks, they promptly shut down lots of their old fashioned mines that produced smoky coal and plumbed themselves up to heat natural gas.

Things went well until a few years ago when the North Sea oil and gas fields went into depletion and are now at the point where the British are close to not producing enough natural gas to cover domestic needs during the winter. This year, they have only 11 day's reserve of natural gas compared to an average of 55 days on the continent. In order to keep people from freezing, the British are making plans to shutdown large industrial gas users if supplies get too low.

What about this side of the Atlantic ? Leaving aside for a minute the issue of whether the big oscillation is really about to turn negative with all that it implies, it’s obvious a substantial, sudden increase in demand for heating fuels from any user as large as Europe, is going to drive world prices for oil products much higher.

What does the US Government say about all this? Last week the Weather Service's National Climate Prediction Center issued their outlook for the coming winter. It seems that from the center of the country to the west coast it should be a relatively toasty winter— which is a good thing because we don't have much heating fuel to keep us warm this year.

For the northeast however, where the British fear we will be shoveling for months, the current prediction is "equal chances" for warmer or colder than normal. As part of their prediction, the Center acknowledges that should North Atlantic Oscillation turn negative, our east coast will have "more frequent cold air outbreaks and snowstorms." However, the bottom-line is that "the phase of the NOA is difficult to anticipate more than two weeks in advance."

There clearly is quite a difference in apprehension here. The British are sounding alarms and ordering all hands to battle stations, while the US is saying "we can't tell yet" on an obscure government web site. The difference of course is directly proportional to the consequences.

The British fully recognize that should the country run out of heating fuel while they are engulfed in 20 degrees below normal weather, the country would be facing the greatest challenge since the Battle of Britain. Thus, when an "experimental" climate-modeling program says there is a 2 out of 3 chance of very cold weather next January; they take to the barricades and start planning.

In the US however, we face a somewhat different set of circumstances. First, it is only the northeast that would have a problem should the NAO go negative. Second, given the precarious state of our natural gas and gasoline reserves, any official announcement that the east coast just might be an icebox next winter would drive the oil futures market and the price of gasoline through the roof. This in turn would drive down the stock market and the administration's popularity polls.

Given this warning would be based on an experimental climate model, from the government's perspective there really is little harm in waiting until winter to see what happens. We are not going to ration anything before the Congressional elections unless we absolutely have to.

In the meantime, it seems prudent to lay in a good supply of firewood and check the shovels just in case a series of snowstorms hits the east coast this winter. Also keep in mind that if you should hear someone complain about the price of gasoline going to $4 next February, you can now smile knowingly and say "Yes, it was bound to happen once the North Atlantic Oscillation turned negative."

http://www.fcnp.com/533/peakoil.htm

Reader Comments

One of the problems with hopers, Auntigrav, is that it might be easy to see a way out (e.g. less discretionary use) but getting to that way out is nigh impossible. Although a drastic reduction in discretionary use is possible, almost no one will do so without coercion and coercion will not happen. When such reduction does come, it will be through price. This is a double whammy. Not only does a price high, enough to make a significant dent in use, add to costs for almost all products, the reduced use causes a reduction in economic activity. This probably spells recession. But, with the mathematics of oil (and growth), it won't stop there. There will be everlasting recession (probably with some periods of modest recovery) until society moves to a new model. This isn't going to be easy at all.

- Tony

While I agree that price is the only current limit on discretionary use -- we're already seeing it in the aftermath of Katrina/Rita -- coercion will happen sooner or later. When fuel prices and inflation get high enough, and stay there, people will demand that government "do something," and it's likely that will bring rationing and price controls. If current trends continue, I expect it will be a major issue in the next presidential elections. The GOP will argue for letting the market determine usage patterns, while the Dems will demand wage and price controls and energy rationing, perhaps along the lines of what was proposed in Britain recently.

-Cash

I'm getting less 'peak'-ish these days, when I look at the amount of discretionary oil use that goes on around me. (Half?) of the oil we use is for transportation, supply/demand differences of less than 1% cause 50-100% change in gas prices. When production falls a little short, EVERYONE thinks about the high prices, and either puts up or stays home a little more. If only half the people use 2% less fuel (air in their tires), it compensates for that 1% supply shortage(ANWR). I do NOT have faith in the 'invisible' hand, but I can see the visible one of more people riding the bus to work. As someone with a large basic skills set, and a certain misanthropy, I'm disappointed, but hopeful that we can also move toward Community Supported Agriculture and Community Supported Manufacturing without as much chaos as a total collapse would cause. I may be ignoring the economic collapse that might come from Nongrowth Perception Realization, though.

-auntigrav

Link

Here is a link submitted by a reader, a site with extensive information.

http://web.wt.net/~twayburn/CwC.html

Thanks for submitting it Tom.

Syriana

There is an interesting movie, where oil is $20 a gallon (outrageous, but it's the best we've seen from Hollywood so far) coming out in December, called Syriana. Look into it.

Debate brews: Has oil production peaked?

USA Today

By David J. Lynch
October 16, 2005

Almost since the dawn of the oil age, people have worried about the taps running dry. So far, the worrywarts have been wrong. Oil men from John D. Rockefeller to T. Boone Pickens always manage to find new gushers.

But now, a vocal minority of experts says world oil production is at or near its peak. Existing wells are tiring. New discoveries have disappointed for a decade. And standard assessments of what remains in the biggest reservoirs in the Middle East, they argue, are little more than guesses.

“There isn't a middle argument. It's a finite resource. The only debate should be over when we peak,” says Matthew Simmons, a Houston investment banker and author of a new book that questions Saudi Arabia's oil reserves.

Today's gasoline prices are high because Hurricanes Katrina and Rita disrupted oil production in the Gulf of Mexico. But emergency supplies from strategic oil reserves in the United States and abroad can largely compensate for that temporary shortfall. If the “peak oil” advocates are correct, however, today's transient shortages and high prices will soon become a permanent way of life. Just as individual oil fields inevitably reach a point at which it gets harder and more expensive to extract the oil before output declines, global oil production is about to crest, they say. Since 2000, the cost of finding and developing new sources of oil has risen about 15% annually, according to the John S. Herold consulting firm.

As global demand rises, American consumers will find themselves in a bidding war with others around the world for scarce oil supplies. That will send prices of gasoline, heating oil and all petroleum-related products soaring.

“The least-bad scenario is a hard landing, global recession worse than the 1930s,” says Kenneth Deffeyes, a Princeton University professor emeritus of geosciences. “The worst-case borrows from the Four Horsemen of the Apocalypse: war, famine, pestilence and death.”

He's not kidding: Production of pesticides and fertilizers needed to sustain crop yields rely on large quantities of chemicals derived from petroleum. And Stanford University's Amos Nur says China and the United States could “slide into a military conflict” over oil.

There's no question that demand is rising. Last year, global oil consumption jumped 3.5%, or 2.8 million barrels a day. The U.S. Energy Information Administration projects demand rising from the current 84 million barrels a day to 103 million barrels by 2015. If China and India — where cars and factories are proliferating madly — start consuming oil at just one-half of current U.S. per-capita levels, global demand would jump 96%, according to Nur.

Such forecasts put the doom in doomsday. Many in the industry reject the notion that global oil production can't keep up. “This is the fifth time we've run out of oil since the 1880s,” scoffs Daniel Yergin, who won a Pulitzer Prize for his 1991 oil industry history The Prize.

In June, Yergin's consulting firm, Cambridge Energy Research Associates (CERA) in Cambridge, Mass., concluded oil supplies would exceed demand through 2010. Plenty of new oil is likely to be found in the Middle East and off the coasts of Brazil and Nigeria, Yergin says.

“There's a lot more oil out there still to find,” says Peter Jackson, a veteran geologist who co-authored the CERA study.

Based on current technology, peak oil production won't occur before 2020, Yergin says. And even if it does, oil production volumes won't plummet immediately; they'll coast for years on an “undulating plateau,” he says.

Both sides in the peak oil controversy agree that oil is a finite resource and that every year, the world consumes more oil than it discovers. But those are about the only things they agree upon.
As the debate has persisted, it's grown personal. “Peak oil” believers disparage those who disagree as mere “economists” in thrall to the magic of the marketplace or simple-minded “optimists” who assume every new well will score.

Yergin emphasizes that the CERA study was developed by geologists and petroleum engineers, not social scientists. Of Simmons, Yergin says: “He's wonderful at stirring up an argument and slinging around rhetoric. … For some of these people, it seems to be a theological issue. For us, it's an analytic issue.”

When they're not trading insults, the two sides disagree fiercely over the likelihood of future technology breakthroughs, prospects for so-called unconventional fuel sources such as oil sands and even the state of Saudi Arabia's reserves.

The world's No. 1 oil exporter, in fact, is at the center of Simmons' new book, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, which has reinvigorated the peak oil argument.

Simmons says it's impossible for global production to keep up with surging demand unless the Saudis can increase daily production beyond today's 9.5 million barrels and continue pumping comfortably for decades. And, indeed, Yergin is counting on the Saudis to reach 13 million barrels a day by 2015.

Yet while the oil reserves of U.S. firms are verified by the U.S. Geological Survey, the Saudis — like other OPEC countries — don't allow independent audits of their reservoirs. So when Riyadh says it has 263 billion barrels locked up beneath the desert, the world has to take it at its word.
Simmons didn't. Instead, two years ago, he pulled about 200 technical papers from the files of the Society of Petroleum Engineers and performed his own assessment. His conclusion: The Saudis are increasingly straining to drag oil out of aging fields and could suffer a “production collapse” at any time.

Yergin is more optimistic both about the Saudis and the industry's prospects in general. If the past is any guide, technological breakthroughs will reshape both demand and supply, he says. In the 1970s, for example, the deepest offshore wells were drilled in 600 feet of water. Today, a Chevron well in the Gulf of Mexico draws oil from 10,011 feet below the surface.

Widespread use of technologies such as remote sensing and automation in “digital oil fields” could boost global oil reserves by 125 billion barrels, CERA says. Already, advanced software and “down hole measurement” devices to track what's happening in the well have elevated recovery rates in some North Sea fields to 60% from the industry average of 35%, Jackson says.
Technology also won't stand still on the consumption side of the equation, Yergin says. “By 2025 or 2030, we'll probably be moving around in vehicles quite different from the ones we drive today. Maybe we'll be driving around in vehicles that get 110 miles to the gallon,” he says.

That's more than a guess. Toyota's 2001-model Prius hybrid got 48 miles per gallon; the 2005 model was up to 55 mpg. If automakers focused solely on energy efficiency, 110 mpg isn't out of the question.

Still, breakthroughs don't just happen, and in the late 1990s, after oil prices fell as low as $12 a barrel, major oil companies slashed research spending. Some who previously doubted the peak oil claims now wonder whether the industry is equipped to develop the necessary innovations.
“Before 1998, I was on the side that said, ‘Technology solves all problems,' ” says Roger Anderson of Lamont-Doherty Earth Observatory of Columbia University. “The problem is, after $12 oil, oil companies responded by merging and firing large portions of their technical staff.”

Now, the International Energy Agency in Paris estimates that $5 trillion in new spending is needed over the next 30 years to improve exploration and production.

As oil prices — now about $63 a barrel — stay elevated, so-called unconventional supplies of oil become economically feasible. Exhibit one: enormous deposits of Canadian oil sands, which could eventually yield more than 170 billion barrels of oil. On the list of the world's biggest oil countries, that total puts the USA's northern neighbor behind only Saudi Arabia.

That's the good news. The bad news is that wringing oil from the sludge-like tar sands is difficult and costly, and requires enormous quantities of water and natural gas — itself an ever-pricier fuel.

Deffeyes calls talk of substantial tar sands production “the fantasy of economists,” adding: “They believe if you show up at the cashier's window with enough money, God will put more oil in the ground.”

In recent months, the peak oil camp has received support from some fairly sober quarters, including the U.S. government. A 91-page study prepared in February for the Energy Department concluded: “The world is fast approaching the inevitable peaking of conventional world oil production … (a problem) unlike any yet faced by modern industrial society.”

So far, almost no one in government is calling for immediate action because of the peak oil argument. But in a recent interview with USA TODAY, Energy Secretary Samuel Bodman sounded less than sanguine about the future.

“There's plenty of oil to deal with this over the near term, five years. But if you look out over the next 20, 25 years, we expect demand to grow 50% to 120 million barrels a day. I wouldn't want to opine that's available,” says Bodman, a former professor of chemical engineering at Massachusetts Institute of Technology. “It could be, but I don't know.”

http://www.usatoday.com/money/industries/energy/2005-10-16-oil-1a-cover-usat_x.htm

Welcome

Welcome-

Finally finished pasting full text versions of all the articles linked to on my webpage (www.geocities.com/peakoil20). I will update this site frequently with comments and news.

The name of this blog comes from James Howard Kunstler's book The Long Emergency.

Feel free to email me at peakoil20 - at - yahoo.com.

Thanks.

The Peak Oil Crisis: When Will Peak Oil Arrive?

Falls Church News-Press

By Tom Whipple
October 13, 2005

Nearly anyone who studies our world oil supply knows that someday production will peak and start its inexorable course downward. Moreover, everybody knows there are many events — hurricanes, wars, terrorism, regime changes, and proliferation squabbles to name a few — that could cause such a large and prolonged downturn in a country's or region's oil. By the time the cause of the interruption is remedied, the rest of the world's oil producing countries would be so far down the depletion curve, resumed production would not matter.

Thus, the issue comes down to one of a.) peak oil coming "naturally" as a result of the simple inability of the world's oil producers to continue to supply an increasing amount of oil, or b.) some outside force stopping a significant amount of production. This issue is hotly debated with some believing we may have already passed the year of peak oil, while others see worldwide production increasing by tens of million of barrels per day beyond the current 85 or so million.

Much of the reasoning behind the debate is political rather than scientific. No politician is eager to deal with the fallout from the widespread perception that we are about to run out of cheap gas. In recent days, the head of the International Energy Agency (IEA) has been running around Europe telling people peak oil is not an immediate problem. This, in turn, gives cover to political leaders who can point to the IEA as backing the claim that peak oil is not imminent. It is much easier to pretend the issue won't arise for decades when our grandchildren aided by some fortuitous technological breakthroughs, can deal with the unhappy occurrence in an orderly fashion.

Moreover, nations exporting oil certainly don't want to admit, or release data indicating their production is about to peak, for with decreasing oil production comes decreasing status and political stability.

Finally, there are people who genuinely believe high oil prices will bring forth increased oil production, from expensive-to-produce places, new exploration, or technological advances. Thus, those who believe the peak is decades away seem to be extreme optimists or have some sort of political ax to grind.

Last week, however, the Association for the Study of Peak Oil (ASPO), the oldest and most prestigious of the unbiased organizations studying peak oil, released a new estimate of the year in which peak oil will arrive. The new date, which is based on a reevaluation of the potential for further deepwater oil production, is now 2010 vs. the previous estimate of 2007. It should be noted that a few years back the ASPO moved the date back from 2010 to 2007 based on turmoil in the Middle East .

Until now, most independent observers have concluded that world oil production would peak within the next two or three years. We now have an authoritative estimate, which pushes the date to five years.

To get a better grip on this issue, let's reflect for a moment the variables going into determining the year oil will peak.

First, keep in mind that 85 million barrels are extracted from the earth each day, refined and sent on their way to the world's fuel tanks, factories, and electric power plants. Most of this oil comes from tens of thousands of wells drilled in hundreds of fields around the world (a small amount is mined and cooked from tar sands at great expense.)

Everyday, hundreds of these wells are depleted to a point where they are no longer worth keeping in production and are replaced by new wells to keep production up. When a country can no longer find places to drill new cost-effective wells, it is said to be in depletion. This means that no matter what it invests, it can no longer maintain or increase the rate of production it reached at its peak.

Fifteen years ago, only the US and Romania were in depletion. Now some 20 major oil producing countries and dozens of smaller ones are in the stage of declining national production. In the next couple of years, several others will join the ranks of countries in depletion.

While current world production from existing fields is dropping by somewhat over a million barrels per day each year, this depletion rate is soon expected to increase to something on the order of 2 million barrels per day each year. Now, these are serious numbers, for if we can't get replacement production from new fields going, in 10 years worldwide oil output will be down from 85 million barrels per day to something like 65 million— and a whole lot of things will have changed.

This is where deepwater oil comes in. Although a few countries still have some onshore and shallow water reserves, most of new growth to offset the decline from existing fields is expected to come from deepwater (below 400 meters) fields.

Twenty years ago, deepwater oil was looked on as the future of the oil business. Since that time, however, some 1,800 deepwater exploratory wells have been drilled offshore of 70 countries. The bottom line is, that while an estimated 50 billion barrels of oil have been found, economically exploitable deepwater fields have only been found in the Gulf of Mexico , and off of Nigeria , Angola , and Brazil .

Lest any of you be impressed by the prospects of some 50 billion barrels of new deepwater oil, you should keep in mind, we are currently pumping out 30 billion barrels a year. If no major new deepwater fields are found, deepwater oil will extend the cheap oil age by about 20 months.

Thus, while the ASPO projects "regular" (onshore and continental shelf) oil production to drop by 6 million barrels per day between now and 2010, the association also projects deepwater oil production will climb from the current 3.6 million barrels per day to some 11 million by 2010. After that, deepwater production will peak and drop to 5 million barrels per day by 2020.

I’m sure the folks at ASPO have done their arithmetic properly and that, should all go well, more oil might be coming out of the ground in 2010 than in 2005. But, it’s the "should all go well" that bothers me; for if one starts making a list of the events that might bring the cheap oil age to an abrupt end, it is frightening.

In a recent article on the energypulse.net web site, Ronald Cook lists some 18 assumptions that have to go right in the next five years in order for an increasing supply of oil to come out of the ground:

• Stability or prolonged civil war in Iraq ?
• Terrorists do or don't cause prolonged disruptions by blowing up infrastructure or governments up?
• OPEC really has the reserves they claim so that one or more major suppliers don't go into sudden depletion?
• Schedules are kept so that many multi-billion dollar projects come into production when they are supposed to. (Five years without disruptive hurricanes)?
• The price of oil stays at a level where people can afford it?

Recent history suggests that five years of tranquil growth for further oil production simply will not come to pass. As many have commented, our recent hurricanes alone will probably turn out to be enough to bring us to peak oil sooner rather than later.

http://www.fcnp.com/532/peakoil.htm

The Peak Oil Crisis: COG & Peak Oil

Falls Church News-Press

By Tom Whipple
October 6, 2005

In the Washington metropolitan area we have an organization called the Council of Governments. Known as "COG" to its intimates, the group attempts to coordinate the policies and actions of the 21 state and local governments that govern one piece or another of the region. Some of these governments are world famous, such as the nation's capital. Others are rather large, such as Fairfax County with a million residents, and still others are village-sized.

The major function of the council is to study issues and make policy recommendations to its members that can be carried out in common. In peak oil circles, COG is remembered best as the folks who invented the odd-even system that linked license plate numbers with days of the month thereby cutting the gas lines in half during the gas shortages of the 70's.

This week, COG held a public forum on the looming energy crisis entitled the “Impacts of High Gasoline Prices.” They certainly picked the right day, for as I left for the meeting, the price at my local station was $2.99; on the way home it had risen to $3.09.

For the discussion of gas prices, COG assembled a distinguished panel of economists and a senior analyst from the federal Energy Information Administration (EIA) to explain the origins of expensive gas and look at the implications for the regional economy.

The man from EIA quickly outlined the situation. Prices had climbed from something over a dollar at the beginning of the decade to over $3 today. He pointed out that about half the cost of each gallon was the crude and that the rest was refining, shipping, taxes and profit. He showed the rapid growth in world demand for oil, which increased by some 2.6 million barrels per day in 2004, and is projected to increase by another 1.6 million barrels this year and next. He showed charts indicating our gasoline inventories are currently low and how gasoline consumption in the United States usually climbs from a winter low of some 8.5 million barrels a day to an August peak of 9.5 million.

Without being alarmist, he noted that the hurricanes temporarily had taken out a good piece of US crude production and refining capacity, but he left us with the general impression that with a some re-jiggering and additional imports of foreign gasoline, we will somehow muddle through.

We then got to the economists. The first speaker pointed out that in the Washington area we have seen little reduction in driving due to the price of gasoline climbing from $1.50 to $2.50. The conclusion is that in the short run, people simply have no alternatives to using their cars in nearly the accustomed manner. A listener is left with the impression that the overall economic activity in the Washington area is growing so well due to increased government spending, that economic damage from the markedly increased costs of gasoline is thus far minimal.

Our next economist pointed out that while there can be many beneficial effects of rising gas prices, such as greater transit usage, more car pooling, and cleaner air, there will soon be serious reductions in revenues for local governments. This will be due to the fixed price per gallon of our gasoline tax and reduced receipts of user fees as discretionary spending slows. He proposed a new regional 15 cents per gallon tax to be imposed next year, followed by annual 2-cent increase for five years as a way to offset declining governmental revenue.

The final speaker spoke of the impact increasing gasoline prices would eventually have on the growth of the local economy. Although the economic situation in the Washington area is one of the strongest in the county, economic growth is already starting to be stifled by the millions of dollars going to pay for the extra cost of gasoline.

Question time brought out some new information and concerns. The EIA has undergone funding cuts in recent years just as we are about to need them the most. They are currently reevaluating their projected cost of a barrel of oil. In a year when the price has been as high as $70 and many are talking of $100 per barrel, an estimate that oil will sell for around $30 for the next few years does seems outdated.

A number of planners in the audience were clearly concerned about the prospects for their 30-year plans projecting the future of transportation and housing density.

Only once during the meeting was the phrase "Hubbert's Peak" mentioned, and this only came in the middle of a lengthy question from a visiting energy professional. It is doubtful that many in the room grasped the import of the reference.

So where did all this leave us?

First, it is good that governments are starting to talk and think about rising energy costs. When approaching a phenomenon with the potential to turn industrial civilization on its head, it is best to start slowly. High gas prices are about as good a starting place as any, for charging directly into the concept of peak oil and all its ramifications is an awful lot to take in at once.

If one has an insight into the deeper forces causing higher gas prices, then one realizes that "solutions" such as relatively small increases or decreases in gasoline taxes are likely to be inadequate for the problem at hand. Gasoline prices have become so volatile, the 17-cent state tax we pay in Virginia is lost. As this is being written, I am looking at gasoline ranging from $2.79 to 3.39 in Northern Virginia — a 60 cent spread.

Meanwhile in the Washington area, we are still waiting for the full impact of the hurricanes to reach our gas pumps. Reports of the damage to oil production facilities in the Gulf of Mexico are not good. Some are now saying it may take years, to get back to pre-hurricane levels of production and exploration.

In a newspaper interview last weekend, the Secretary of Energy Samuel Bodman said that "Both in terms of gasoline availability and (prices of) natural gas and heating oil, we're going to have some problems." He does not expect the situation to return to "normal" for at least six months, and has kicked off a big voluntary energy conservation program— but no 55 mph speed limit yet. For an administration that has heretofore held that cheap, plentiful fuel was every American's birthright, this is indeed a big change.

We are still waiting for the other shoe to drop.

http://www.fcnp.com/531/peakoil.htm

The Peak Oil Crisis: Congressman Bartlett's Conference

Falls Church News-Press

By Tom Whipple
September 29, 2005

Of the 535 members of Congress, it seems that only one, Roscoe Bartlett of western Maryland , fully appreciates the nature and seriousness of the impending peak oil crisis. Bartlett has given a series of speeches on the House floor outlining the problems ahead and scheduled a meeting to discuss peak oil face-to-face with President Bush. On Monday, he participated in an energy conference in Frederick , MD organized by his office.

As the only peak oil Congressman— the rest presumably remember what happened to Jimmy Carter— Bartlett was able to attract an all-star panel consisting of: Kenneth Deffeyes, the geologist who reworked the original Hubbert calculations to determine that peak oil will occur on Thanksgiving Day 2005; Matthew Simmons, the Houston banker who recently published a book concluding that Saudi oil production has, or is about to peak: and Richard Heinberg, who has written extensively on life after oil depletion starts. Another set of panelists talked about actions we can take to soften the impending crash. A transcript of the proceedings will be available on the Congressman's web site.

For those familiar with the tenets of peak oil, the message was familiar: It will start soon; it is already too late to mitigate the effects; and a global economic depression will only be one of the many hardships the world will face.

On a humorous note, Deffeyes revealed that calculations that oil production would peak on Thanksgiving Day 2005 really had some wriggle room so that the appointed day could come as much as three weeks before or after Thanksgiving. On a more somber note, Deffeyes said there is bound to be some sort of oil rationing

Simmons characterized the present situation as the culmination of 50 years of energy planning mistakes. Only a few years ago, energy planners believed demand would peak, supply would grow, and oil would be cheap. But instead, demand grew, production costs doubled, there were few new discoveries, and reserves turned out to have been overstated.

All this led to a situation where by August 2005 spare capacity had dropped to the point that the world was effectively at 100 percent of production capacity. Then came the Hurricanes taking away more production capacity than was left to offset the damage. We do not yet know the full implications of this situation.

Simmons calls for the nation to go immediately onto an "energy war" footing, where productive capacity and the ingenuity of the country is mobilized to deal with the crisis.

Heinberg now believes peak oil may look more like a bumpy plateau with much volatility in prices and production with events such a hurricanes, wars, demand destruction, and political moves alternately cutting and stimulating additional production. As do the other panelists, he foresees major problems in the global economy, transportation, food production, and resource wars. He emphasized the impact on localities, as people struggle to get to work, feed themselves and heat their homes.

The next panel discussed ways to save energy in transportation, buildings and industry. The dominant theme was that our current machinery and practices are highly wasteful and that we have the existing technology to live on only a small fraction of our current consumption, such as 100-mpg cars and buildings that get by nicely on 20 percent of current energy consumption.

The key point made during the panel discussions was that the nation's goal has got to be movement towards 100 percent renewable energy: water, solar, wind, waves, biomass etc. As the US currently gets only seven percent of its energy from these sources, the idea of nearly all energy coming from renewables is often derided as an impossible dream. The point the panel made is that within a few decades, we will have no other choice.

One interesting note came during the questioning, when a member of the audience asked Congressman Bartlett about his meeting on peak oil with President Bush. Did the President understand?

Bartlett responded "Yes, the President understands" but it is the age-old problem of the urgent vs. the important. Apparently, the President believed that as of this summer he had more pressing issues to deal with than the possibility the world's oil supply would one day start to decline.

On Monday, however, the President issued a call for Americans to conserve gas by driving less and directed all federal agencies to cut gasoline consumption. This is a major change in the administration's position for many years has emphasizing production of additional oil over conservation and alternative energy.


It is beginning to sound as if the President knows the hurricane damage to offshore production is far more serious than has been generally reported, and that it may be a while before all the Gulf refineries are back in production. If this is indeed the case, higher prices and gas lines (rationing by inconvenience) are not far ahead.

http://www.fcnp.com/530/peakoil.htm

Peak Oil means era of cheap gas is over

Desoto Sun Herald

By Bob Bowden
September 29, 2005

"My father rode a camel. I drive a car. My son flies a jet airplane. His son will ride a camel."

-- popular saying in Saudi Arabia

* * *

If a former Shell Oil researcher and Princeton professor named Kenneth Deffeyes is correct, this Thanksgiving will be a momentous date in history.

No, not because it marks the centennial of downtown Arcadia burning down.

In the bigger picture, Nov. 25, according to Deffeyes, is the date that we reach what is called Peak Oil. On that date, half of the oil ever available -- 2 trillion barrels -- will have been used up. Supply will never again be able to meet demand.

For us, Thanksgiving is the end of the inexpensive ride we have enjoyed since oil became the lubricant for our economy.

Ahead, we face a choice: Experience a collapse of the global economy; or find a way to wean ourselves of an oil addiction where 5 percent of the world's population consumes one-fourth of this finite resource.

That's us. We're fossil fuel hogs.

We drive gas-guzzling SUVs, build ever bigger houses requiring more electricity to heat and cool, fly and boat for fun, and push aside concerns that the remaining oil might be better used for pharmaceuticals, making computers, or helping create alternative energy infrastructures.
Our attitudes must change with Peak Oil. Or our lifestyles will.

See, when demand outstrips supply, a commodity's scarcity inflates its price. That will happen with gasoline and fuel oil. And soon, most predict. The day of cheap oil is over. Forever.
There could even be panic at the pumps. A 1973 crimp in oil supply from the Middle East created lines and shortages at gas stations. That was a 5-percent crimp. That exact crimp, according to Vice President Dick Cheney in a speech, will be the shortfall in the first year after Peak Oil.

The pessimists on this subject foresaw our war with Iraq. They called it Oil War I. Iran will be the location of Oil War II, they predict. We must have that oil on the marketplace. We'll kill for it. Die for it. We'll draft our sons and daughters just to quench our oil thirst. We'll trade blood for oil.

Do you see a government in place that is preparing alternative energy sources as the oil supply wanes? Have you taken steps to become more energy independent?

If we do nothing, examples of our Peak Oil future are close at hand. They're the Mennonite communities in Sarasota and DeSoto counties. Nice folks. Don't use much oil.

* * *

"The solution is to pray. Under the best of circumstances, if all prayers are answered, there will be no crisis for maybe two years. After that, it's a certainty."

-- Matthew Simmons, energy investment banker and adviser to George W. Bush

http://www.sun-herald.com/NewsArchive4/092905/tp4de4.htm?date=092905&story=tp4de4.htm

A Peek at Peak Oil, Inc.

Willamette Week

By Adrian Chen
September 28, 2005

War. Famine. Pestilence. Death. It's a mid-September Thursday night, and these calamities are projected in bold, black letters onto the wall of a basement conference room in the downtown Portland Marriott. Those are a few of the bleaker scenarios predicted once global oil production begins to dwindle, explains Dr. Kenneth Deffeyes, a Princeton geologist and author of Beyond Oil: The View From Hubbert's Peak. Published earlier this year, the book offers a less-than-optimistic view of the coming global energy crisis.

"I took those words from the four horsemen in the Bible," Deffeyes jokes at the podium. The audience of about 250, a bizarre mix of dreadlocked enviros and clean-cut financial types, laughs nervously. They're here for a seminar on energy investment hosted by MKG Financial, a local trends investment firm.

Deffeyes, the keynote speaker, is among the leaders in a growing faction of scientists, politicians, and activists-known as the Peak Oil movement-who are clamoring that the Age of Oil is about to end. Soon. In fact, Deffeyes predicts that global oil production will peak this Thanksgiving, thus beginning a long, painful slide to zero.

Judging from his own financial advice, Deffeyes is a strange choice to speak at an investment forum: Earlier in the day, he half-jokingly advised me to put my savings into 1/8th-ounce gold pieces. His argument: "They'll be easier to make change with" than larger pieces in a post-apocalyptic economy.

The guy sitting next to me, an IT professor at Willamette University, might have considered Deffeyes' advice more seriously than I did.

"I just came to see how I can profit off of all this," he whispers as Mark Gaskell, head of MKG Financial, takes the podium to tell us how to do just that. After Gaskell finishes without mentioning gold pieces once, a representative from a fuel-cell manufacturer starts his presentation. His company's projected profits rise on graphs as sharply as Deffeyes' oil-production numbers plummeted.

With the meeting now turned to a fuel-cell infomercial, Emily Pollard, a member of the grassroots organization Portland Peak Oil, leaves the conference room to distribute brochures in the hall. She just came to see Deffeyes.

"Those other guys are full of it," she gripes. "I don't know how they can sleep at night."
Theressa Latoski, another member of Portland Peak Oil, has enlisted Roger, an MKG employee, to help hand out flyers advertising a screening of the film The End of Suburbia, an activist favorite. Roger stands sheepishly in a suit and tie, back to the wall, offering the papers to passersby.

"He kicked me out at first, but after he found out I was allowed to be here, he felt really bad and offered to help," explains Latoski, a former campaign worker for 2004 Democratic presidential hopeful Dennis Kucinich. Just then, Roger spots a client and hustles off to escort him to the bathroom.

An elderly couple is surveying cookies laid on a table next to us. They're MKG clients who came to see what the future has in store for their grandkids. He's an engineer, and she's just started taking college classes again. Well, actually, she's taking a break.

"I didn't get along with my teacher," she says. "She was one of those '60s hippie-types." She glances around and gives a theatrical shudder. "From Vermont."

Applause signals the end of the two-hour-long presentation, and the crowd files into the hall. Overheard conversations are all profit margins and radioactive mushroom clouds of doom. I'm thinking about a mushroom cloud of 1/8th-ounce gold pieces and, grabbing two cookies, promise to make this a killer last Thanksgiving dinner ever.

http://www.wweek.com/story.php?story=6783

The Peak Oil Crisis: The First Casualty

Falls Church News-Press

By Tom Whipple
September 22, 2005

When the historians come to write the history of the 21st Century, they may well record that the African nation of Zimbabwe was the first to succumb to peak oil.

For students of African economies, the current Zimbabwean meltdown comes as no surprise. During the last decade, Zimbabwe 's dysfunctional government got itself involved in war that drained the treasury and then implemented a land redistribution program that drove out the white farmers. These actions devastated exports and led to runaway inflation. The Mugabe government finally got into so much trouble with the International Monetary Fund for failure to make meaningful reforms and repayments, that it is constantly on the verge of being thrown out of the IMF and in turn, can no longer avail itself of the Fund's services

When the price of oil started climbing into the $65+ range, official oil imports simply stopped. The country currently does not have the foreign exchange to purchase oil and it seems nobody is willing to extend credit on acceptable terms. Rigged elections and expropriated land have left the country at odds with the usual foreign aid donors so that only humanitarian food shipments are currently arriving in the country.

A few years ago, the government turned much of the oil import business over to the private sector while retaining price caps on retail gasoline. Obviously, when the cost of oil got higher than the permissible sales price, gas stations went dry. This has resulted in a black market where gasoline is selling for ten times the controlled price.

While Zimbabwe 's multiple economic problems make it an atypical case, it is the first country to run almost completely out of oil. This, in turn, gives us a look at what will happen as the consequences of expensive and scarce oil spreads around the globe.

By last week, nearly all buses and commuter taxis in the capitol, Harare , had stopped running, forcing tens of thousands to walk to work. While there are still a lot of private cars on the road, they are being fueled with $36 a gallon black market gasoline. Municipal services have stopped. There are no trash collections, no ambulances, or operating public works vehicles. Only one fire truck has any fuel left. The police immediately commandeer any fuel they come across. Clean water and electricity are available sporadically. Hospitals are out of supplies and the staff is fleeing. What was once one of the cleanest, most modern cities in Africa is nearly finished.

The long-term effects on the Zimbabwean economy are equally dire. The only sugar refinery is shut due to a lack of coal caused by a lack of fuel for the coal-transporting railroad. Production of tobacco, a major export crop, is already down to 30 percent of pre-land reform levels. It now appears that only about five percent of the normal crop will be planted this year.

Large numbers of Zimbabweans are fleeing the county in the midst of what is clearly an economic death spiral. Famine, mass movements of peoples, and political turmoil cannot be far behind.

In the case of Zimbabwe , all this human misery is not completely attributable to peak oil and unaffordable gasoline; an abysmally incompetent government is playing a major part in the country's economic demise well in advance of better governed nations. It is, however, representative of what we will see again and again as oil depletion sets in. In the US , we are discussing whether tax cuts are the proper remedy for expensive gasoline. In Africa , people are starting to starve.

Somewhere in the future, peak oil will evolve a test of mankind's humanity to our less fortunate fellows. Will some sort of oil depletion protocol come to pass allowing at least of modicum of oil to support every country's essential services? Or will peak oil be marked by survival of the richest? This will soon be seen as the heart of the peak oil moral dilemma.

http://www.fcnp.com/529/peakoil.htm

The Peak Oil Crisis: Y2K & Peak Oil

Falls Church News-Press

By Tom Whipple
September 15, 2005

Do you remember Y2K? Back at the end of the last century, the world was seized with the notion that at the stroke of midnight between the old and new millennia, many of the world's most important computers would come to a halt. The lights would go out, the phones would cease to function, and our bank balances would be reset to zero. All this was to happen in one instant, because the ancients who invented the first computer programming decided not to include century digits in the date fields.

As I recall, my local government spent some $10+ million getting ready for the event. Aged COBOL programmers were called from retirement to fix faulty computer code. Generators were leased to provide emergency power when the lights went out and police were on full alert to deal with the resulting civil disturbances. However, the appointed time of the appointed day arrived and nothing discernible happened. Either the aged programmers did a great job or there never really was a problem.

The point of all this is that with Y2K, we knew years in advance and the exact second when something that could have been very bad was going to happen and we outdid ourselves preparing. Would it were so with peak oil.

The ongoing debate about when peak oil will come is starting to spill over into the mainstream press. Last week, even the New York Times ran a story airing both sides of the issue leaving the reader to decide whether the Armageddon of oil depletion is just around the corner or is decades away.

Both sides in the debate acknowledge petroleum deposits are finite and concede that one day, the greatest cornucopia the world has ever known will end. What is at issue is, whether we should be doing something now to get ready, or if we can we relax and let the next generation deal with it.

While it is easy to lay out the factors determining when peak oil will occur, it is difficult to put an accurate value on many of the interconnected variables, to permit anyone to say just when the trouble will begin.

The basics are simple. There are currently a lot of oilfields in the world that together are producing 84 million barrels of oil per day. In recent years, the demand for this oil has been growing by a couple of million barrels a year; however, the unprecedented price increases that have taken place in the last year are starting to reduce demand.

Thus, we have the first complication for picking a year when oil depletion will begin. How much and how fast will demand be reduced by the much higher prices that will come as we get closer to the peak? In the United States , it seems to be very little so far. In the poorer parts of the world, $65 oil is clearly destroying demand at an alarming rate.

Worldwide, total oil production from existing fields has been dropping by about 1 million barrels per day each year as more and more older fields reach their peak and go into decline. This worldwide decline from existing fields is expected to increase markedly in the next few years as more producing countries reach their individual peaks. Many believe this decline may be faster than previously believed due to the damage caused by modern production techniques of injecting water and gas into the earth to force out the oil.

The only way to stem this worldwide decline is to go and start up new oil fields. Thus, each year ahead, we must bring into production some 2-3 million barrels a day of oil from new drilling projects or face serious economic troubles. Is this possible, and for how long can we keep it up?

Starting a new oil field, especially under the sea, is a big project costing billions of dollars and it takes at least 4-5 years before meaningful quantities of oil start to flow. Most of these big projects are well publicized so that interested analysts can follow the progress and make informed estimates as to how much oil they will be producing in which future year.

Several research organizations in the US and Europe have attempted to tabulate the worldwide increases in production expected from new oil fields. Strangely enough, two of the most widely publicized of these research efforts have reached startling different conclusions.

In the US, Cambridge Energy Research Associates(CERA) rejects the notion of peak oil coming in this decade and does not foresee real production shortages coming until after 2020, maybe in the 2030's or 40's. CERA calculates that between 11 and 16 million barrels a day of new production will come online in the next five years— more than enough to satisfy increasing demand and overcome the loss of production from older fields.

Over in Britain however, the Petroleum Review's annual tabulation also agrees that enough oil is scheduled to come from new projects in the next couple of years to meet demand. However, they are far more worried about whether these "projects" can be turned into actual production on time and what the actual pace of oil depletion in the older fields will be. Taken together, they foresee the possibility of shortages beginning in the next two years and serious problems developing thereafter.

The Petroleum Review does not believe enough new oil development projects are underway to replace the decline from aged oil fields and meet the needs of continued world economic growth.

While there is no known phenomenon that can create large quantities of new oil production, the world is rife with ways to stop existing flows. Two weeks ago, Hurricane Katrina took a big piece out of a million barrels of daily production for an indefinite period. Two years ago, the US invasion of Iraq took a million barrels per day out of production.

It does not take much imagination to foresee the Iraqi situation deteriorating into a full-blown civil war that would stop another million plus barrels of production each day. From there, there are endless possibilities for sectarian and tribal fighting spread across the oil producing states of the region. If any of this were to happen, then peak oil would occur on the spot, for even if this production was to be resumed in some more peaceful age the renewed output would only stem the decline.

Acceptance of peak oil seems to be a lot like acceptance of global warming. As long as a handful of "scientists" express doubts it is actually happening, there is sufficient reason for the government to wait for better evidence before committing to doing something.

No one wants to hear that peak oil is coming, and as long as some "respected" voices can claim peak oilers are false prophets, most will listen.

Of one thing we can be certain. The outcome of all this will not be nearly as pleasant as that of Y2K.

http://www.fcnp.com/528/peakoil.htm

On Oil Supply, Opinions Aren't Scarce

New York Times

By Joseph Nocera
September 9, 2005

We're halfway through the hydrocarbon era," my old friend T. Boone Pickens has been saying for the last couple of years. You may remember Mr. Pickens as the most famous corporate raider of the 1980's, but he has spent his life in the oil patch. A geologist by training, Mr. Pickens founded Mesa Petroleum at the age of 26 and ran it for the next 40 years. Now, at 77, he works the oil patch in a different way, running a pair of energy-oriented hedge funds in Dallas.

A folksy line like Mr. Pickens's - it sticks with you. But I hadn't realized until recently that it also meant Mr. Pickens had taken sides in a surprisingly heated debate. He subscribes to what is being called the peak oil hypothesis, which holds that there simply isn't very much new oil left to be found in the world. As a result, we are currently in the gradual process of draining the more than a trillion barrels of proven reserves that are still in the ground. And when it's gone, it's gone.

The best-known "peakist" these days is Matthew R. Simmons, who runs Simmons & Company, an investment bank and consulting firm in Houston specializing in energy companies. Mr. Simmons's essential belief, he told me recently, is that energy demand is about to exceed supply significantly. And that was pre-Hurricane Katrina - before the storm damaged refineries, pipelines and offshore rigs all along the Gulf Coast. "I would argue that we are in a serious energy crisis," Mr. Simmons added. He forecasts increasing oil prices.

There is a second group of forecasters, though, who argue with equal vehemence that the world is not in an energy crisis and it probably won't face one for a very long time. The best-known proponent of this view is Daniel Yergin, author of "The Prize: The Epic Quest for Oil, Money and Power," a history of oil that won the 1992 Pulitzer Prize, and the founder of a rather sizable consulting firm, Cambridge Energy Research Associates.

"This is the fifth time that we're supposedly running out of oil," Mr. Yergin said. But, he added, each time new technologies made it possible for oil companies to find new sources of oil and extract new oil from old sources. His firm released a survey a few months ago that says from 2004 to 2010, world oil supplies will have increased by as much as 16 million barrels a day, "outstripping the likely demand increase." Most of those who hold this view say that oil prices will eventually drift down.

DOES it surprise you to learn that when it comes to one of most vital resources known to man, there could be such an incredible divergence of opinion? It sure surprised me. Even some of the oil majors are on opposites sides, with Chevron taking the peakist view, and Exxon Mobil more aligned with the Yergin camp.

There are three reasons for this lack of consensus. First, because oil is buried underground, it is hard to measure. So basic "facts" - like how much oil remains, and how much can be ultimately extracted - are as much the product of guesswork as science. Second, the world of oil can be shrouded in secrecy. As an article in The New York Times Magazine recently pointed out, Saudi Arabia, the biggest producer of them all, won't even allow its reserve and production data to be audited.

Finally, though, the fact that this enormous divergence has developed speaks volumes about the very different way each camp views the world. "It's the geologists on one side and the economists on the other side," was the way the energy analyst Seth Kleinman of PFC Energy in Washington put it recently. That's an overgeneralization, of course, but one that contains plenty of truth.

The two sides do agree on one thing: the recent run-up in oil prices, which began well before Hurricane Katrina, has come about because demand for oil has caught up with supply. The enormous burst of economic activity in China, the generally good economic conditions in the United States and the rest of the West - these and other factors have led to a surge in oil demand.

"The world produces about 85 million barrels a day," Mr. Pickens said. "That's where demand is now, too. And I've seen forecasts that demand is going to be higher than that by the end of the year."

What's more, Mr. Pickens added, pre-Hurricane Katrina refining capacity was already at the breaking point, which is another point that is pretty unarguable. "Refineries were operating at 96 percent," he said. "You can't operate anything at 96 percent. It'll start breaking down."

That last paragraph, though, encapsulates the world view of the peakists: all the easy deals have been done. One reason refineries are operating at such high capacity is that no new refineries have been built in the United States for some 30 years, which Mr. Simmons believes can be attributed to the shortsightedness of the industry. "My theory was that if the industry didn't expand like crazy the U.S. would find itself running short of energy." It didn't, and we are.

Even more troubling, the pessimists believe that it is going to be increasingly difficult to replace the oil that we're now using up. "Let me give you a number that is pretty shocking when you hear it," Mr. Pickens said. "The world uses 30 billion barrels of oil a year. There is no way we're replacing 30 billion barrels of oil. Just a million barrels a day is 1,000 wells producing 1,000 barrels. That's big."

How do the economists counter the geologists' arguments? They don't deny that it is hard to find new oil. But they believe that whenever tight supplies push up the price of oil, the rising price itself becomes our salvation. For one thing, higher prices temper demand as people begin to change their energy habits. (Mr. Pickens believes this as well.) Surprisingly, this has not yet happened even as gasoline at the pump has more than doubled in the last year or so. But inevitably, there will come a point when it will change behaviors.

Secondly, they believe higher prices spur innovation. Oil that couldn't be extracted profitably at, say, $15 a barrel, can be enormously profitable at $60 a barrel. In the view of Mr. Yergin and his allies, in fact, this is exactly what has been happening. They point to new oil that is coming out of the Caspian Sea, deepwater drilling in Brazil and the oil sands in northern Alberta as examples. The 16 million barrels a day of new oil Mr. Yergin expects to see by 2010, he told me, "is predicated on $25-to-$30 oil." If oil stays higher than that, then there will be even more investment, and not just in ways to extract oil, but in new refineries and pipelines and other infrastructure.

If you mention this theory to a hard-core peakist like Mr. Simmons, you'd better be ready for an earful. "These economists are so smug," he said derisively. "All they talk about is the magic of the free market. They don't seem to understand that this is incredibly capital intensive."

He pointed to those Canadian oil sands - where, he said, Shell Canada recently announced it was going to raise its investment to $7.3 billion from $4 billion to produce an additional 100,000 barrels a day. "Just think about that; $3.3 billion for just 100,000 barrels," he said. "Doesn't that tell you something?"

Of course the economists can be just as dismissive of the peakists. "I've gone from disagreeing with them to debunking them," scoffed the energy consultant Michael C. Lynch. "I believe the world will expand the reserve base. If you put a road in the middle of the jungle, that can wind up expanding the resource base."

"By most estimates," he added, "total global resources is eight trillion barrels of oil. They are saying only a small percentage of that is recoverable, and you can't do anything about it. We are saying the amount that is recoverable expands over time."

I wish I had the confidence to make my own forecast, but in this case, I don't. What I do know - what we all know - is that oil is a finite resource. Surely, the peakists are right about that. What I also know is historically, the economists have generally been right about how the price of oil has wound up fixing the problem.

As Gary N. Ross, the chief executive of the PIRA Energy Group, puts it: "Price is the only thing that matters. The new threshold of price will do its magic on the supply-and-demand side."

http://www.postcarbon.org/node/902

The Peak Oil Crisis: The Storms of August

Falls Church News-Press

By Tom Whipple
September 8, 2005

It has become fashionable in peak oil circles to make the comparison between the current summer and that of 1914— just before the cataclysm of World War I. That year too, was a warm and idyllic summer in which the people went happily about their business unaware the assassination of an archduke was about to destroy the old order and plunge the world into decades of turmoil.

This time, the trouble spawned in the South Atlantic , strengthened in a global-warmed Caribbean and slammed into the heart of the US oil industry. The flooding of New Orleans and the destruction of miles of the Gulf coast will rank among the greatest natural disasters America has ever known, for a number of reasons.

For the Gulf oil industry, the approach of a Category 5 Hurricane was a signal to shutdown and run for cover. The super tankers bringing up to 900,000 barrels a day to the Louisiana Offshore Oil Port (The LOOP) headed elsewhere. The 55,000 oil workers on platforms out in the Gulf shut off the pumps, plugged their wells, and boarded ships and helicopters to safety, thus halting the production of some 1.4 million barrels of oil a day — some seven percent of US daily consumption.

Eight refineries in the path of the storm were shut down and the workers evacuated. This reduced immediately US refining by 1.8 million barrels a day.

As the storm moved towards shore, first the offshore oil platforms in its path were badly mauled. Some 30 rigs were sunk including hubs that concentrate and prepare the oil for transport to shore. We do not yet have a complete assessment of the damage to the undersea network of pipelines that brings the oil to shore, but if the damage done by much weaker Hurricane Ivan last year is any guide it should be considerable. In the opinion of one knowledgeable commentator, it will take years to bring production back to pre-hurricane levels.

Finally, the storm cut the electricity to the pipelines moving some 3 million barrels per day of gasoline, jet fuel, and heating oil from the Gulf refineries to consumers in the mid-west and the East Coast.

The week before the hurricane, the US gasoline inventory was down to 194 million barrels or about a 19-day supply. The loss of production from 10 refineries and the shutting down of the pipelines soon led to spot shortages running from the Rockies through the mid-west to the Southeast. The West Coast and north of New York are not part of the Gulf oil infrastructure.

As could be expected, spot shortages quickly developed as long as the pipelines were out of operation and local distributors had to rely on whatever inventory was in their tank farms. Panic buying added to the problem. In the Washington area, Exxon-Mobile reported that their sales doubled as people rushed to fill their tanks in face of rapidly rising prices and potential shortages.

By week's end, however, the electricity was restored to the pipelines and an additional 20 days supply became available to the south eastern states. (It takes about 20 days for a barrel of oil to pop out in Virginia once it has entered the pipeline.)

The reopening of the pipelines, of course, takes care of our fuel supply for the next couple of weeks, but what about the missing 1.4 million barrels of daily production from the Gulf and the gasoline from the four severely damaged refineries?

As soon as the Administration became aware of the extent of the losses, it made a decision. As any one who follows the world energy situation knows, the worldwide supply and demand situation is extremely tight. OPEC has no spare production capacity, except possibly for some sour, heavy, hard to refine crude from Saudi Arabia . US refineries have been running flat out for months. In this situation, the only choice was conservation or borrowing. They chose to borrow.

The first borrowing was from the US strategic petroleum reserve, which was just topped up to its authorized 700 million barrels last month. A release from strategic reserves is supposed to be a joint decision of all the 26 members of Paris-based International Energy Agency (IEA), so initially the Administration "loaned" petroleum to Louisiana refineries that were still operational, but had lost their crude supplies from the Gulf.

After a series of urgent meetings, the IEA agreed to honor international commitments and voted for a one-month release of 60 million barrels of crude and refined products from its members' strategic reserve stocks to stabilize the world energy situation during the crisis.

About half the "release," is to come from the US strategic reserve and the rest, mainly refined products, will come from other IEA members stockpiles. About 20 percent will come from Japan and other Asian countries, 10 percent from Germany , seven percent from France , and five percent from Spain .

Now we get to the key question of what all this means for those of us living here on the East Coast and who are hopelessly dependent on Gulf produced or refined oil for our lifestyles and livelihoods.

First, there will be an unprecedented natural gas problem this winter with prices increasing several fold and there will most likely be serious shortages. There is simply no way to replace the shut-in Gulf production in time for the winter heating season.

Next, our gasoline and jet fuel supplies here in Virginia , are precarious to say the least. For the next few weeks, inventories should be sufficient to prevent a general shortage. After that, much depends on the speed with which the heavily damaged refineries can be repaired and the willingness or ability of Europe and wealthy Asian nations to keep shipping us gasoline.

Already, European editorial writers and columnists are starting to grumble. They raise the specter of Americans in Hummers, gobbling up Europe 's heating oil for next winter. The head of the IEA warned that there will be a worldwide energy crisis if the US tries to replace its missing oil production and gasoline refining by outbidding everyone else on the world market. As usual, it is the poor African nations that will suffer the most. Furthermore, it is becoming evident that $3-4 gasoline does not significantly reduce American consumption and that we will continue driving at our normal pace until stopped by still higher prices or general shortages.

What does the hurricane damage have to do with peak oil? World production and consumption are currently balanced at around 84 million barrels a day. Losing a million plus of this for an indefinite period certainly doesn't help increase production. This time, there is no sign of our Saudi friends coming to the rescue as in past oil crises. Given the decline of production taking place in most of the world's major oil fields, it is becoming increasing difficult to make a case for significantly higher levels of world oil production are on the horizon.

For the United States , borrowing our way out of the current predicament without any serious conservation measures (such as a 55 mph speed limit or rationing) certainly can't last long.

Several years ago Kenneth Deffeyes, one of the leading peak oil theorists, facetiously selected Thanksgiving 2005 as the exact date the world would reach Hubbert's peak. You know, it is starting to look as if he just might be right.

http://www.fcnp.com/527/peakoil.htm