Friday, December 30, 2005

The Peak Oil Crisis: Growing Our Fuels

Falls Church News-Press

December 29, 2005

It is time to revisit the question of using biomass as the feedstock for our liquid fuels, as it is looking more and more like we will have few other choices.

While converting coal to liquid fuels is possible and obviously popular in coal producing states, there are limits on how far coal can go to replace oil as a source for liquid fuels. If coal consumption increases rapidly to meet the need for liquid fuels, then our estimated 250-year supply would quickly turn into a 50-year supply and we would be back where we started. Converting one fossil fuel into another may be a reasonable short-term transition strategy, but it is not going help our grandchildren.

Before going further, it needs to be pointed out that, at present, there seems to be no way growing fuel can make up for the 325 billion gallons of petroleum products the US uses each year.

Even if we take the most optimistic projections, that the US can produce 1.5 billion tons of biomass (plant and other organic material that can be converted into ethanol) per year, and assume we can process 100 gallons of ethanol out of each ton, we only come up with 150 billon gallons of liquid fuel per year.

Even if we take the most optimistic projections, that the US can produce 1.5 billion tons of biomass (plant and other organic material that can be converted into ethanol) per year, and assume we can process 100 gallons of ethanol out of each ton, we only come up with 150 billon gallons of liquid fuel per year.

Therefore, there is simply no alternative to massive conservation efforts both in the short and long run. The US can no longer be a consumer of 21+ million barrels of oil per day— especially with our natural gas supplies showing signs of running low.

Many are skeptical we can ever grow a significant portion of our fuel needs, as biomass currently is contributing only about three percent of US energy consumption. However, recent studies and research breakthroughs offer hope.

Last spring, a joint study prepared by the US Departments of Energy and Agriculture concluded the country could remove some 370 million dry tons of biomass from our forests each year and could grow an additional billion tons of biomass on agricultural land on a sustainable basis. If this proves to be the case, it appears the raw biomass would not be a problem.

How might a large scale biomass-to-fuels industry work? First, growing and processing biomass is going to be a local industry compared to the way our oil companies currently work. Hauling millions of tons of grass or tree branches across the country to large centralized processing plants will not work because you would use a large portion of the fuel you are trying to make hauling the raw material to a distant processing plant. Thus, growing and processing biomass into fuel is going to be a cottage industry with hundreds or thousands of small to medium sized processing plants scattered all over our rural areas.

Perceptive readers will start to see why the big oil companies, who are used to oil fields yielding millions or even billions of barrels, can't get too excited about building thousands of mini-refineries in rural counties and arranging for the biomass feedstock to be grown by thousands of farmers.

The product from processing biomass into fuel would be either biodiesel or ethanol. Neither of these products is new. They currently are widely sold in Midwestern states as a way of using up the oversupply of corn and soybeans the US has been producing in recent decades. Urban readers might not be aware that average corn yields in the US have gone up from 20 bushels per acre in the 1930s to over 160 bushels per acre today and are projected to increase to over 200— if our fertilizer production holds out in the face of natural gas shortages.

During the current era of cheap oil, converting surplus grains to fuel is primarily a way to help US agriculture by increasing the demand for its products even if it takes a government subsidy. The fact corn based ethanol is taking nearly as much energy to produce as it is yielding is not particularly relevant.

All that is about to change. As the price of conventional liquid fuels increases above the cost of producing biomass into fuel, the demand for ethanol made from crops quickly will surge to undreamed of proportions. The issue of "we have to eat too," of course, will put a limit on the portion of our food crops that can be turned into motor fuel

Without going too deeply into the chemistry of converting plants to fuel, biomass has edible components (starch, food oils, and protein) and non-edible components (lignin, hemicellulose, and cellulose). While there still appears to be some room for growth in converting edible biomass (soybeans, corn, rapeseed) to fuel, the real jackpot will come from the non-edible components, called lignocellulosic biomass.

There currently are four ways of converting lignocellulosic biomass into the ethanol that can be used in an internal combustion engine. They all work at laboratory scale and, as yet, it is too early to tell which technology will be the most cost effective when scaled to industrial quantities. The various conversion techniques are said to yield from 60 to 130 gallons of ethanol per ton of biomass feedstock. There is currently a pilot conversion plant working up in Canada .

One of the more promising sources of grown-for-fuel biomass is a native American plant called switchgrass. This grass, which can grow up to nine feet tall, is a perennial requiring low inputs of fertilizer, yet yields 5-8 tons per acre. At 65 gallons of ethanol per ton, each acre could produce about 425 gallons per year. Right now, the cost of growing and converting switchgrass to ethanol can't quite compete with gasoline even at $2.25 per gallon, but when the price of oil moves higher than locally produced ethanol, it will become very attractive.

For those concerned with global warming, it should be noted that biomass based fuels are "carbon neutral." That means the carbon released when ethanol or biodiesel are burned was recently absorbed from the air as the plant was growing. Thus, there is no net addition of carbon to the atmosphere as there is from burning fossil fuels whose carbon was absorbed from the atmosphere eons ago.

The last point to consider is how we can start producing and consuming biomass for fuel prior to the advent of very expensive gasoline. The trouble is it will take many years or decades to get a nationwide biomass-based ethanol industry going. Establishing a good stand of switchgrass can take three growing seasons and a lot of work.

One early step might be to require a small percentage of switchgrass be added to the fuel in coal-fired power plants. This would not only reduce emissions from the power plant but would establish a market for switchgrass prior to the construction of lignocellulosic processing plants.

The bright spot in all this is that American agriculture, which has been suffering from low agricultural prices wrought by 60 years of heavy fertilization and pesticides application, now has much better prospects. The arrival of peak oil, coupled with the developing shortages of natural gas and the consequent demand for coal, will leave biomass as the least costly source for transportation fuels. Farmers as well as the environment will certainly do better.

The sooner we can get started on this new paradigm, the better for us all.

Thursday, December 29, 2005

Oil Market Analysts Issue Dire Warnings


By Humberto Marquez
December 29, 2005

CARACAS, Dec 29 (IPS) - While this year's record high oil prices are unlikely to come down in the near future, analysts are warning the world's traditional and emerging economic powers to curb consumption, saying that at the current rate, proven reserves will only meet demand up to 2030

"The current model (of consumption) is suicidal," Venezuelan Energy Minister Rafael Ramírez recently told journalists. "The United States, for example, will use up its oil reserves in 10 years, and after that it will go after its rivers, lakes and forests."

This month, Democratic Party lawmakers in the U.S. Senate narrowly blocked a Republican-led bill that would have allowed drilling for oil in Alaska's Arctic National Wildlife Refuge, which has an estimated 10 billion barrels in reserves.

The United States devours one out of four of the 84 million barrels of oil consumed daily around the world, and one out of two litres of gasoline.

But the emerging powers are steadily closing the consumption gap. In India, less than 200,000 new cars were sold annually two decades ago, compared to 802,000 in 2004.

"Since oil began to be drilled in 1859, the world has consumed 900 billion barrels - nearly half of the planet's reserves (according to an oil industry expert quoted by the Wall Street Journal), which means we'll have oil for another 50 years at the most," said Francisco Mieres, a professor of postgraduate studies on the oil economy at Venezuela's Central University.

But because consumption is increasing every year, driven by economic growth rates like those of China - which have ranged between seven and 11 percent a year - "oil will perhaps only last until 2030, even including reserves like Alaska's and the Athabasca tar sands" in Alberta, Canada, Mieres told IPS.

That long-term outlook will also be affected by more immediate political factors, "like the difficulties faced by the United States in the Middle East, rebellious governments like those of Venezuela and (the future administration of leftist president-elect Evo Morales in) Bolivia, or the radicalisation of Iran's leadership," he added.

On the economic front, Mieres said these developments would discourage investment by large corporations.

He also mentioned the competition between China, India and other emerging powers to get their hands on the available oil resources, and the real or expected decline in deposits in the North Sea, the Caspian Sea, Mexico or Siberia in Russia.

"The era of cheap oil is over," is a phrase repeated over and over by experts like Ramírez, Mieres or Colin Campbell, the founder of the Association for the Study of Peak Oil & Gas (ASPO).

U.S. benchmark West Texas Intermediate (WTI) soared to 70.85 dollars per barrel on Aug. 30, when Hurricane Katrina devastated New Orleans and much of the U.S. Gulf Coast oil-producing region.

The Organisation of Petroleum Exporting Countries (OPEC) basket of crudes averaged 50 dollars a barrel this year, bringing the members of the oil cartel more than 500 billion dollars in revenues. By comparison, the average price stood at 36 dollars a barrel in 2004, and 28 dollars in 2003.

And the year is coming to an end with international oil prices ranging between 50 and 60 dollars a barrel.

Nevertheless, the late January OPEC ministerial meeting "should decide to reduce output to keep prices from dropping," said Ramírez.

The members of OPEC - Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela - pump a combined total of 30 million barrels a day.

And OPEC president Sheikh Ahmad al-Fahd al-Sabah visited Moscow this week to persuade Russia, the world's second biggest oil producer after Saudi Arabia - it produces nine million barrels a day - to cooperate with the cartel, in order to avoid flooding the market.

OPEC, according to al-Sabah, would be willing to withdraw up to two million barrels a day from the market if springtime is warm as forecast, which would lead to a drop in demand in the second quarter of 2006.

But Ramírez asserted that "the responsibility for supplies and prices cannot only fall on the shoulders of producers."

"Importer countries, whether industrialised or emerging economies, should rationalise consumption," he argued.

In addition, "the burden of internal taxes is overwhelming," he said. "In Europe, for example, taxes account for 70 percent of the final price for energy paid by consumers."

Venezuelan Foreign Minister Alí Rodríguez, a former OPEC secretary-general, said that "in this respect, France is more of an 'oil country' than those of the Persian Gulf, because the French state obtains more revenues from oil than the countries in that region."

And in small countries like those of Central America, whose oil bill has doubled over the past three years to nearly five billion dollars a year, one out of every three dollars paid by consumers in gas stations goes to taxes.

Ramírez also stated that "the markets cannot be stabilised if political instability is provoked in producer countries, because that gives rise to high costs and uncertainty." He pointed to the U.S. invasion of Iraq, and the George W. Bush administration's pressure on Iran and open hostility towards the Venezuelan government of Hugo Chávez.

This year, international oil relations shifted after the Chávez administration reached cooperation agreements based on oil supplies. Mexico also took steps in that direction.

Chávez launched Petrocaribe, an alliance under which Venezuela will provide 198,000 barrels a day of oil to 13 Caribbean nations, with financing for up to 40 percent of the bill. In addition, Caracas will accept payment in the form of products or services.

Mexico, meanwhile, reached an agreement with its Central American neighbours to build a new refinery and gas pipeline in that region.

Since 1980, Venezuela and Mexico, Latin America's biggest oil producers, have sold 160,000 barrels a day, divided in equal parts, to nations in Central America and the Caribbean on preferential terms, with financing for up to 20 percent of the total cost, under the San José Pact.

But the Pact has sometimes faced difficulties in implementation because the beneficiaries must in exchange purchase products from Mexico and Venezuela.

Caracas also promoted the creation of Petrosur, based on alliances among South American nations that began with supplies of heating oil and fuel oil to Argentina, to be paid for with agricultural and manufactured goods, as well as a contract with shipyards in Argentina to manufacture and repair vessels for Venezuela's oil fleet.

Paraguay and Uruguay will also receive Venezuelan oil shipments under terms similar to those offered through Petrocaribe. In addition, the state-owned oil companies Petróleos de Venezuela (PDVSA) and Brazil's Petrobras signed agreements and will begin construction of a refinery in northeastern Brazil.

Furthermore, Venezuela set aside deposits in the southestern Faja del Orinoco - considered the world's biggest reserve of extra heavy crude oil, with 230 billion barrels - for joint ventures with state-owned firms from Argentina, Brazil and Uruguay.

South American countries also foresee the construction of a gas pipeline running from Venezuela's Caribbean coast to the Río de la Plata (River Plate, located between Argentina and Uruguay). The project will involve Bolivia, whose president-elect, Morales, is a political ally of Chávez and other left-leaning leaders in the region.

Even Colombia, which is governed by right-wing President Alvaro Uribe, has entered into an association with Venezuela to build a binational oil pipeline connecting Venezuela's oilfields with the Pacific coast.

Oil producers Ecuador and Peru, and Chile, an oil importer, have also expressed interest in taking part in the new energy integration schemes, which differ from the traditional commercial relations of the past.

The need to ensure supplies of energy, which will soon become scarce, in a context of sustained high prices, has fuelled the new forms of cooperation that have been emerging in the developing South.

China, which will purchase 5.4 million barrels of Venezuelan oil this month, hopes to receive a total of 300,000 barrels a day from this country starting in 2006, and has explored with OPEC the possibility of long-term cooperation mechanisms. (END/2005)

Tuesday, December 27, 2005

Syriana: Hollywood's Oil Flick

Toward Freedom (VT)

By Rob Williams
December 27, 2005

Director Stephen Gaghan’s gripping new film "Syriana" explores the roots of 21st century civilization’s biggest dilemma: Peak Oil. Inexpensive fossil fuels – oil and natural gas – have floated both the corporate-controlled global economy and U.S. imperial planetary hegemony for the past several decades. Now, the party is over, as "elephant" fields like Kuwait’s Burgan are peaking, oil companies are maintaining sagging portfolios by buying up other companies’ reserves (real and fictitious). The world is beginning to grasp the significance of living without immediate and inexpensive access to one of the 20th century’s most vital resources.

Perhaps "Syriana’s" biggest weakness (if one can call it that) is that Gaghan doesn’t pander to his audience. Instead, he seamlessly stitches together a complex and fast-moving narrative that tracks more than a dozen characters on four continents, assuming we know more about the way the world really works than we might.

To fully appreciate "Syriana’s" storyline, it’s important to understand that the world currently consumes 80 million barrels of oil a day, with the globe’s richest and most powerful empire (that’s the U.S.) burning up 20 million of those barrels. Understand, further, that the United States reached "peak oil" (maximum domestic production capacity) in 1970, when it produced 10 million barrels of oil a day. Now, as U.S. supply dwindles, the country currently produce only 5 million domestic barrels a day (while consuming 20 million, remember), for a yearly consumption total of 7 billion barrels, while possessing only 28 billion barrels in strategic reserves. That leaves fifteen million barrels of oil the U.S. needs each day that we can’t produce ourselves. If oil-producing nations (say Iran or Venezuela) cut the U.S. off tomorrow, we’d have only four years of oil and natural gas left.

Rather than give the oil-producing nations of the world that kind of power, U.S. based energy corporations (the fictional Connex and Killan corporations, who merge in "Syriana) and the U.S. government (now essentially the same entity, with Team Bush/Cheney/Condi/ Wolfy/Rummy running DC) have worked tirelessly during the past few decades to secure control over the world’s remaining fossil fuel reserves.

Make no mistake – under cover of a post-911 "war on terror," the U.S. government is waging a sequential struggle to control the planet’s known remaining oil and natural gas reserves - Afghanistan and Iraq are but stepping stones to increased U.S. geo-strategic control over the greater Middle East.

The C.I.A., represented in "Syriana" by George Clooney’s Bob Barnes, an agent who moves from true believer to angry skeptic, exists primarily to do the unpleasant but necessary work of funding Wall Street bankers and fueling U.S. imperial expansion by employing a wide variety of tools to ensure that the right deals are made by the right governments: drug smuggling, money laundering, weapons smuggling, election skullduggery, and assassination. Access and control of oil reserves is integral to their mission, as "Syriana" suggests.

And, as "Syriana" makes plain throughout the story, energy corporations and the U.S. government are doing this, not just to make huge profits, but to perpetuate the current oil-lubricated American way of life for as long as possible. Many of us may pay lip service to opposing Team Bush/Exxon/ Cheney/ Halliburton’s plans, but as long as we refuse to make a radical energy shift, we are complicit in this whole exercise. Without being heavy-handed or preachy, Gaghan reminds us of this in subtle ways throughout the film.

And, lest we get too cranky with ourselves, other powerful nations (China, with an economy exploding at an annual 10% rate, takes center stage in "Syriana") are desperately looking for fuel, and the often-corrupt patriarchal emirs of Middle Eastern oil-producing nations are happy to sell, especially if it means enriching their own pockets and building their own palaces as part of the bargain. And what if a more enlightened desert despot (Iran’s Prince Nasir in "Syriana) wishes to sell his country’s black gold to the highest bidder (say, China) to make possible a more democratic, tolerant and prosperous society for his own people? Declare him a terrorist ("communist" or "socialist" are so retro) and eliminate him.

"Everything is connected," reads "Syrian’s" tag line. Indeed it is. We also meet energy trader Bryan Woodman (Matt Damon), who ends up backing Nasir’s efforts to nationalize his country’s energy fields; Iranian and displaced oil worker-turned fundamentalist/terrorist Wasim Khan; investigative lawyer Bennett Holiday (Jeffrey Wright) and a host of other characters whose lives converge in one of the most provocative and true-to-life stories of our time.

"Syriana" is probably the closest Hollywood will ever come to presenting on honest picture of our Peak Oil dilemma. Don’t miss it.

Sunday, December 25, 2005

Oil Majors Pumping Cash into Reinvention of Image

Times Online, UK

By Carl Mortished
December 24, 2005

IT’S energy without carbon emissions — almost — and BP is spending a mint telling us all about it.

BP is advertising its proposal to build a novel power plant in Scotland that will extract hydrogen from natural gas and use it to make electricity while it stuffs the residual carbon dioxide down an old North Sea oil well.

Carbon sequestration could cut 90 per cent of carbon dioxide emissions, BP claims, a figure that adorns a multimillion-dollar advertising campaign with the catch-line: “This time what we don’t produce is more important.”

What BP does not produce, it does not yet produce because Peterhead is still on the drawing board. There is an added cost in separating hydrogen from natural gas, so the project needs a subsidy and talks with the Government continue. Vivienne Cox, BP’s head of gas and renewables, says: “The project needs support.”

Could that explain why Peterhead features prominently in British ads? Might it encourage Gordon Brown, the Chancellor, to give such clever schemes a bit of a boost?

The BP image campaign kicked off at the end of November with the launch of BP Alternative Energy, a unit that will eventually house Peterhead as well as BP’s solar cell and nascent wind power businesses. However, a commitment to spend $8 billion (£4.6 billion) on renewables over the next decade was not enough to sway the Chancellor who a week later raised the tax on North Sea oil profits.

If not aimed at hard-nosed finance ministers, at whom are the ads addressed and what are they really saying?

One purpose is to stand out from the herd. In 2000 BP rebranded itself with the sunburst logo and tag-line “Beyond Petroleum”, aligning itself with consumer concern about green issues. BP was then ridiculed. Evironmentalists derided its “greenwash” and even Fortune magazine jeered: “Here’s a novel advertising strategy. Pitch your least important products and ignore your most important one.”

Five years later BP is having another go and investors are probably not the audience. Jon Rigby, an oil analyst at UBS, the investment bank, admits to being puzzled. “I am not sure how the campaign will help win over global investment institutions. I can’t work out why they are highlighting a relatively small part of their business,” he says.

BP is not alone in addressing issues that challenge its core activity. Chevron’s “Will you join us?” campaign broaches the sensitive subject of dwindling oil reserves in ads featuring letters signed by David O’Reilly, Chevron’s chairman. “It took us 125 years to use the first trillion barrels of oil. We’ll use the next trillion in 30,” he writes.

Matt Simmons, founder of Simmons & Co, the energy investment bank, is an internal critic of the oil industry, questioning the assumption that oil and gas output will carry on rising to meet demand. He doubts, however, that Chevron is a convert to the “peak oil” school of analysis, suggesting, instead, that the energy majors have been rattled by hurricanes, the apparent weakness of some oil infrastructure and a gathering political storm over oil profits. The massive flow of cash into dividends and share buybacks has become politically embarrassing, Simmons reckons.

“David O’Reilly is probably one of the most politically astute men in the oil industry. Chevron has joined a committee to decide what peak oil is about and he has got a lot of praise over it.”
Shell’s first wave of ads, after protests over the Brent Spar and troubles in Nigeria, highlighted environmental issues but recent imagery appears less overtly political. Employees — geologists, scientists and the captain of a liquefied natural gas vessel — talk about their job, what it means to them and what they feel about energy issues. It is an attempt to make human and approachable what to many appears big and frightening.

BP insists that its new campaign is brand building, not a tactical manoeuvre. David Welch, BP’s head of marketing, says: “It is a long-term effort to make people understand the full breadth of what we do.”

It might sound disingenuous but it is probably true. Simmons, a lifetime supporter of the oil industry, despairs of oil’s image problem. “One reason it is so disliked is it has never been able to project a human face,” he says, criticising the industry’s weak public relations response to the hurricane disasters.

Rigby wishes big oil was less apologetic. “They are central to the well-being of the global economy. They should be proud of that.”

Perhaps it is because the old certainties are gone and big oil is puzzled about its future that the story is garbled. Perhaps the strange advertising is an early warning, beamed this time from Houston: “World, we have a problem.”,,9072-1958220,00.html

Friday, December 23, 2005

The Peak Oil Crisis: Sliding Down the Flagpole

Fallls Church News-Press

December 22, 2005

Last week the US Department of Energy released the preliminary version of its Annual Energy Outlook 2006. This document, which projects supply, consumption, and prices for all forms of energy; is the official US government position on what energy resources will be available and at what cost, five, 10, 20, and even 25 years in the future.

For many years, making these annual projections was a rather straightforward exercise. There was plenty of coal, oil, and gas available, so all the forecasters had to do was project a sensible rate for GDP growth, mix in some energy efficiency gains, add a bit of inflation and out came a reasonable set of projections of what the future US energy consumption and prices might look like.

In recent years however, the traditional approach has started to come apart. Can anybody who follows the issue really imagine a product as valuable and as much in demand as oil dropping from its current $60 per barrel to $33 per barrel 20 years from now? Can anyone remotely familiar with the current oil situation really expect world production to increase smoothly from the current 84 million barrels a day (b/d) to 121 million b/d in 2025?

A few seconds with a calculator shows that, until last week, the US government was projecting world oil production will rise from the current 31 billion barrels per year to 44 billion barrels per year in 2025. This says the world would consume some 760 billion barrels during the next 20 years. This is not a serious projection. It will never happen. Most believe there are only about a trillion barrels of conventional oil left and know it is becoming increasingly difficult and expensive to produce.

In the new report, however, the first glimmerings of a change of position regarding the future of oil are starting to appear. The Energy Information Administration (EIA) projections are nowhere near reality as yet, but then these things take time.

Oil is now projected to cost an inflation adjusted $54.08 per barrel in 2025 vs. last year’s estimate of $32.95. This projected increase is to come amidst continued prosperity in the United State and Europe and continued rapid growth of the Chinese and Indian economies. Considering the price of oil is currently bouncing around $60 per barrel, has recently been up to $70, and many are talking of spikes beyond $100, $54.08 twenty years from now sounds rather conservative, if not quaint.

The EIA has reduced its estimate of world oil production in 2025 to some 111 million b/d vs. 121 million in last year’s projection. OPEC is now supposed to reach 44 million barrels per day in 2025 vs. the 55 million projected for 2025 last year. Non-OPEC production is now supposed to increase from the 52 million b/d to 67 million in 2025.

To be fair to the EIA, the estimates cited above are from the “reference case” assuming there are no policy changes and that nothing really bad (or good) happens to change the “normal” growth in oil production.

The interesting part of this story, however, is not that the EIA has started to back off from the very high production projections (and therefore low prices) they have been making. It is the rationale for doing so that is of note.

First we can dismiss the idea that peak oil will have anything to do with the major reduction in the projected world production 20-25 years from now. The Associated Press quotes the EIA Administrator as saying “the oil is there” when asked about suggestions that perhaps world oil production was peaking. To drive home the point, one of the Administrator’s press conference PowerPoints boldly asserts that the reassessment of long-term prices is “Not due to ‘Peak Oil’ considerations”. So there!

It seems the EIA reassessment, however, is based on the realization that the OPEC nations simply are not going to make the massive investments necessary to increase oil production by the amount the EIA had been projecting. There is also the notion the major oil producers are making so much money from increasing prices they don’t really need to increase production to keep making more and more.

Then there are “impediments” to investment -- unfriendly governments, insurgencies, environmental concerns -- and the incredibly high cost of producing oil from remote places such as the arctic or thousands of feet under the sea. All this adds up to the bottom line judgment that the world probably won’t be producing quite as much oil as previously estimated.

Is this reduction in estimated world production going to cause much pain? It seems not, for the EIA is projecting per capita energy use in the US will stay about the same and energy use per dollar of real GDP will drop to about half the current rate. Thus while US oil consumption will continue to grow to 27.6 million b/d by 2030, vs. 21.6 million today, there is no crisis in the foreseeable future. Domestic oil production will remain about the same so imports will continue to grow modestly

All in all the EIA projects a rosy future for energy supplies. Natural gas will come from greatly increased imports of LNG and prices will drop to a reasonable $4-5 per thousand cubic feet, and peak usage won’t occur until 2025.

It sounds great unless of course, it is a house of cards. The same PowerPoint bullet that asserts that the EIA’s reassessment is “not due to ‘Peak Oil’ considerations” goes on to say, “we are following this issue closely.”

So there you have it, the US Government officially is not yet ready to say that “Peak Oil” will have an impact in the next 25-30 years, but they now willing to admit in public that they are watching it closely. A new threshold has been crossed on the way to reality.

Wednesday, December 21, 2005

Viewpoint: We are facing a severe survival test

Rock River Times

By Joe Baker
December 21, 2005

This is the winter of our discontent and also of our discomfort. Our wake up call has arrived. U.S. News, in a recent article analyzing the energy outlook, predicts the next several months will test our survival skills to the maximum.

Peak Oil and Gas are beginning to weigh upon us. Experts in the energy field have been saying for months that natural gas will be our biggest problem this winter, and we are seeing its cost heading for the moon as supplies tighten up.

Some look at the prices at the gasoline pump and believe it all is a matter of big oil companies gouging the consumer, but that analysis is misleading.

Mike Ruppert, publisher of From the Wilderness publications, says it this way: “Peak Oil cannot be a conspiracy of big business to get rich when big businesses are about to be shut down, either because of a lack of energy or a frozen work force. It cannot be a conspiracy of big business when GM and Ford teeter on the edge of bankruptcy; when 800,000 jobs are slated for the ax this winter; when Delta and Northwest are in bankruptcy; when the Federal Reserve has blithely announced it is going to conceal how much money it is printing into the M3 money supply.

“It cannot be a conspiracy to impose a one-world order when the international scene is starting to look like a saloon fight in a ‘B’ Western. It cannot be anything other than what it is: the beginning of the collapse of modern industrialized civilization.”

As the first snowfall of the season smacked the Northeast last week, it became even more apparent that hurricanes Katrina and Rita did a lot more to our energy supply and distribution system than most had thought; the ripples are still spreading through our economy.

Natural gas costs 38 percent more than last year’s record prices, and oil is up 21 percent from that benchmark. So what? So many factories and businesses are going to be closed, and very many people will be out of work, putting additional stress and pressure on poor and low-income families. Few federal dollars will be available to help them.

If this winter brings bitter cold, as it is indicating it might—there will be especially difficult times, particularly in the Northeast, where natural gas shortages will affect electricity supplies, and oil supplies also will suffer. U.S. News quotes Diane Munns, a utility regulator in Iowa who heads the National Association of Regulatory Utility Commissioners. “We pray for warm weather,” Munns said. “We have a prayer chain going. People are talking not just about high prices but actual shortages.”

That sentiment was seconded by Matthew Simmons, a prominent energy investment banker in Houston. “We’re headed into a winter,” said Simmons, “that could be a real winter of discontent.”

Most of the country is still in denial about peak oil and gas, but more are beginning to be aware as the national media finally take note of the problem and start to report on it.

Last summer’s hurricanes hit our oil infrastructure in the Gulf of Mexico harder than anyone had anticipated. The oil industry is reporting 23 percent of the Gulf’s natural gas production—2.3 billion cubic feet per day—will be shut down through March. That is very serious business when you consider 52 percent of U.S. homes heat with gas.

According to U.S. News, the U.S. already was using more natural gas than it produced even before the hurricanes and prices were hitting record levels then. Between 1990 and 2004, demand leaped 16 percent, mostly driven by power plant operators. Natural gas is used to generate electricity.

The country is relying on natural gas from Canada and is turning more and more to liquid natural gas (LNG) shipped from Africa, but the imports aren’t enough to satisfy demand. Roger Cooper, executive vice president of the American Gas Association, told U.S. News: “We’re vulnerable. If we were hit in the 1990s, we would not have been in this situation. But when you are consuming 100 percent of your supply, there’s not much room to maneuver.”

The law of supply and demand is operating, big time. Last week, the market price of natural gas hit $15 per million btu [British nethermal units], more than double the price last year. The normal methods of storing gas in underground caverns, such as NICOR does, are not adequate. The result is higher heat bills for homeowners and tougher choices for businesses.

The National Association of Manufacturers says hundreds of factories will be forced to lay off workers and freeze or cut wages because of the high heating costs. Some of the larger manufacturers have shifted operations overseas, closer to cheaper fuel supplies. Smaller companies don’t have that option. Paul Ciccio, executive director of the Industrial Energy Consumers of America, said: “In manufacturing, there’s just one way to use less energy, and that’s to make less widgets.”

For consumers, the higher costs already are taking their toll. Mervalene Eastman lives on the Crow Indian Reservation in Montana. She is unable to work because of health reasons and also is caring for a 7-year-old nephew. Her situation is desperate.

She was behind on her payments last winter when a $380 bill in December to heat her four-bedroom home climbed by $100 in January and again in February. Now she owes not only back payments but a reconnection fee and a security deposit. All that comes to more than $850, an impossibility for Eastman.

She uses a couple of space heaters and sometimes fires up the oven of her electric range to try to keep warm in Montana’s winters when temperatures can hit 50 below zero Fahrenheit.
“My electric bill is so high,” she told U.S. News, “what I’ve been saving to pay MDU [Montana-Dakota Utilities] I’ve been tapping into to pay electric. Once January comes, I don’t know how I’m going to keep everybody warm.”

It’s a familiar story to Jerry McKim, chief of Iowa’s Bureau of Energy Assistance. “These households are carrying significant debt from last winter into this winter,” he said. “That’s something people aren’t catching.”

The two biggest threats facing the Northeast are: a heating oil shortage, aggravated by the export of distillate fuel oil, which includes both diesel and heating oil, up nearly 50 percent this year; and secondly, a severe shortage of electricity with possible brownouts or blackouts. Many of the power generators are gas-fired and also deregulated and so are under no obligation to continue supplying power; they can simply shut down and sell their fuel at terrific profit.
In New Orleans, already devastated from Hurricane Katrina, a winter failure of the heating system would be catastrophic. Any lengthy heat loss could cause water pipes in commercial and residential buildings to burst, and “traps” where steam escapes could freeze and fail, causing steam pipes to split and lose pressure.

Jim Woolsey, former head of the Central Intelligence Agency, who is dealing with energy issues in the Crescent City, said parts of New Orleans could look like “a frozen New Orleans.”
And the threats don’t stop with the coming of spring. Around the world, agriculture is in trouble. According to the International Society for Ecology and Culture, farmers are going bankrupt in record numbers.

At the same time, global trade in food is booming. Each year, the distance between producers and consumers grows. Today, the average meal in America has traveled more than 1,500 miles to reach your table.

These two trends are linked. Global food economy is harming the majority while enriching the few. Big agriculture is a major contributor to rising carbon dioxide emissions and, as a result, climate change.

We need to be heading in the opposite direction, closing the gap between farmers and consumers. Not only would such a change rejuvenate the land, but it would furnish jobs at the local level, rebuild community and allow farmers to earn a decent living while providing urbanites with healthy, fresh food at affordable prices—without the added transportation costs and fuel consumption.

It may take some time in the dark and cold and some hunger pangs in the belly to wake Americans to that reality. “I hate to sound like the voice of doom,” said McKim, “but somebody has to say this stuff. It’s just like Hurricane Katrina. They knew it was coming, but little was done to prepare an effective response. And the same thing is happening here.”
How are your survival skills?

Monday, December 19, 2005

Analyst sticks to his forecast of oil at $105 a barrel

Bloomberg News

By Alejandro Barbajosa
December 19, 2005

LONDON Arjun Murti, the Goldman Sachs Group analyst who roiled oil markets in March by saying crude could reach $105 a barrel, now says that forecast might be conservative if the "peak oil" theory is right and world supplies are running out.

The theory, which postulates that the world's oil supply is close to an irreversible drop, is no longer "on the fringes" of the market, according to a research report by the New York-based Murti, who forecasts oil prices of between $50 and $105 a barrel until 2009.

The UBS analyst James Hubbard, a former oil engineer at Schlumberger, has said an inevitable decline in supply will start sooner and be worse than expected unless investment is increased for many years.

A jump above $105 a barrel "is possible if we don't invest the right amount of money," Hubbard said in an interview in London.

"There will be a peak in production earlier than expected, and that post-peak decline will be more dramatic than currently assumed unless there is a sustained increase in investment in oil and gas production, greater consumer efficiency and alternative energy sources."

The Saudi Arabian oil minister, Ali al-Naimi, and the president of Exxon Mobil, Rex Tillerson, have both said oil supplies will last for decades. But energy traders are increasingly debating the amount of available crude after rising demand from China surprised suppliers, who had failed to spend on new pipelines, rigs and refineries.

Tillerson in September told the World Petroleum Congress in Johannesburg that a U.S. Geological Survey estimate of two trillion barrels of conventional oil reserves still to be recovered is conservative, with the range of possibility as high as seven trillion barrels. Less than a trillion barrels has been pumped in the world so far.

Investors who back the peak oil theory, like Boone Pickens, a Dallas-based hedge fund manager and former oil executive, have fueled the price rally of the past two years, when oil almost doubled in price to reach a record $70.85 in August. Prices ended last week at $58.06 a barrel in New York.

Sunday, December 18, 2005

One is by rail; two is by sea

The Roanoke Times

December 18, 2005

The United States must prepare for the inevitable day when fuel oil supplies run short. If the White House won't lead, the states should.

Gov.-elect Tim Kaine's transportation listening tour has brought out the rail enthusiasts along the congested Interstate 81 corridor.

The need for massive improvements, including dedicated truck lanes and expensive tolls, could be avoided if only truck traffic were diverted off the highways and onto the railroads, chants the rising chorus of rail enthusiasts.

They have a point. But making the case on congestion alone won't sway the argument.

Running short on fuel oil should. The world, according to energy experts, has either reached or is nearing peak oil supply. That isn't to say that we've pumped oil reserves dry, but that much of it will remain inaccessible to today's technology that would consume as much energy extracting the oil as it would produce.

"Oil peaking represents a liquid fuels problem, not an 'energy crisis' in the sense that term has often been used," said Dr. Robert L. Hirsch, energy consultant and former chairman of the Board on Energy and Environmental Systems at the National Academies, while testifying Dec. 7 before the House Subcommittee on Energy and Air Quality. "Motor vehicles, aircraft, trains and ships simply have no ready alternative to liquid fuels."

Matthew Simmons, investment banker and author of "Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy" warns, "The idea that this (energy crunch ) is just another spike is the greatest myth of all time."

One of Simmons' suggestions to keep the economy from collapsing once fuel oil becomes scarce is to move freight off the highways and ship goods by the more energy-efficient means of rails and barges.

But it is difficult to entice industry and the government to begin thinking that way when fuel remains relatively inexpensive, the state of "our railroads would make Bulgaria embarrassed" and the time to move goods is extended.

Simmons said that shipping freight from San Diego to Portland, Maine, takes 4.5 days by truck, 12.5 days by barge and 25 days by train. With abundant, cheap fuel, the incentive to move off road is nonexistent.

The challenge for leaders is to project the future, energy-efficient modes of transportation and to persuade the public and industry of the need and means to arrive there. That type of leadership is absent from the White House. The Bush administration's Energy Policy Act ignores the impending liquid fuels crunch, and continues pushing Alaska's limited oil reserves as the saving fuel.

The United States cannot afford to wait three more years to get started, which leaves the initiative to the states.

But Virginia, even with Kaine's favorable view of rail improvements, can't rebuild transcontinental lines. The new governor can spur his counterparts in the I-81 corridor to make ready the way for when fuel oil runs short.
Precedents already exist for such alliances, as when states joined together to address greenhouse gas emissions while the administration foolishly pretended global warming was a myth.

Impending fuel shortages are just as real.

Thursday, December 15, 2005

The Peak Oil Crisis: The Congress Meets Peak Oil

Falls Church News-Press

By Tom Whipple
December 15, 2005

Last week the House of Representatives Committee on Energy and Commerce held its first hearing on peak oil. Appropriately, or perhaps ironically, it took place on December 7, Pearl Harbor Day. The hearing was held at the instigation of Maryland Congressman Roscoe Bartlett, who recently introduced a resolution calling on the government to immediately embark on an international crash program to mitigate the effects of declining world oil production.

However, given the issues currently confronting Congress —Iraq, poll numbers, congressional elections, record budget and trade deficits, global warming, and a pandemic— hearing the world is about to run out of cheap oil is close to the last thing any member of Congress wants to hear. Who on earth would want to go into the next congressional election with their voters thinking gasoline was about to become unaffordable? Just to get a hearing on peak oil is a testimony to the legislative skill of Congressman Bartlett and his standing in the Republican caucus.

When confronted with holding a hearing they really didn’t want, the Committee leadership and staff used the time-tested technique of turning something completely obvious into an academic debate with different points of view.

In effect, the title of the hearing said it all— “Understanding the ‘Peak Oil’ Theory.”

The speakers for both sides were excellent. Bartlett and Congressman Udall of New Mexico led off with a clear case as to why world oil production would be peaking soon with very serious consequences. They were followed by star witnesses Kjell Aleklett, from the Association for the Study of Peak Oil, and Robert Hirsch, from the consulting firm SAIC. The four speakers could not have made the case for peak oil more clearly or succinctly.

The peak-oil-is-imminent speakers were followed by Robert Esser, a senior consultant for Cambridge Energy Research Associates, who told the committee the world “is not running out of oil imminently or in the medium term.” “Rather than an isolated ‘peak’ we should expect an ‘undulating plateau,’ perhaps three or four decades from now,” he said. “The major risks to this outlook however are not below-ground geological factors but above-ground geopolitical factors.”

And that was the hearing. Take your pick: either the world is faced with an imminent catastrophe or an “undulating plateau” decades from now. In the midst of a dozen pressing crises, a theoretical peaking of world oil production certainly will look to most in Congress like something that can be put off until the evidence becomes clearer.

Thus far, the press coverage of the event has been sparse despite the presence of at least a dozen journalists at the hearing. The Oil and Gas Journal, whose readers are obviously concerned, ran an extensive piece on the hearing and the arguments for peak oil. At the other end of the scale, the Wall Street Journal ran a story from Market Watch reporting only the Cambridge Research contention that there will be plenty of oil for decades.

If one were expecting that Congress would have a “ Eureka ” moment because they were given a forceful case that peak oil is imminent, then you should know that Congress does not work that way. A threat thought to be five years away is meaningless.

Thus, this hearing is unlikely to result in the Peak Oil Resolution being reported out to the House floor where the whole House would have to vote on whether peak oil is imminent. The hearings and the resolution however, did result in the formation of a bi-partisan Peak Oil Caucus, which thus far, only has a handful of members.

Someday however, the Energy and Commerce Committee will be holding hearings on “Why is Gasoline $5 a gallon?” Hopefully Congressman Bartlett will still be around to testify about peak oil and his caucus will have grown into the hundreds.

Wednesday, December 14, 2005

Exxon: Oil demand to rise 50%

Dallas Morning News (

By Elizabeth Souder
December 14, 2005

Energy industry can supply what's needed, company says

Exxon Mobil Corp. forecasts global energy demand will rise 50 percent by 2030 and oil will remain the dominant fuel source.

The Irving-based oil company said Tuesday that economic growth in developing countries will drive much of the demand, along with population growth.

The forecast comes one day after the Energy Department predicted oil prices will remain north of $50 a barrel for years.

Exxon declined to forecast energy prices, saying only that its expectations of supply and demand don't support current high prices.

And Exxon said it's confident the energy industry can meet demand, a sentiment some industry experts don't share.

Most experts blame rising demand for the run-up in prices in the past couple of years.
Exxon disagrees with skeptics who warn that oil production will soon peak because humans have used nearly half the oil in the world.

"What we've seen, through doing this for decades, is that repeated predictions of peak oil have proved wrong time after time," Jaime Spellings, Exxon's general manager of corporate planning, said in a conference call.

"We're very comfortable with the resource size to support the production outlook," he said, adding that new technology plays an important role in meeting demand.

Electricity generation is the fastest-growing energy need, boosting demand for coal and natural gas as well, Exxon said.

Dominant fuel

Oil use will grow more slowly, but oil will remain the dominant fuel, Exxon predicts, driven by transportation needs.

The company expects the global fleet of cars and light trucks to rise by 1 percent a year until 2030, with the fleet in Asia Pacific quadrupling in that time.

Demand for hybrid cars in North America and Europe should eventually begin pushing demand for gasoline and diesel vehicles down, the company said.

Exxon expects gasoline demand in North America to remain constant for the next 30 years as cars become more efficient, and more people buy diesel and hybrid cars. But demand for gasoline in Asia Pacific will probably triple.

The world's largest company by revenue predicted the energy industry will keep up with that demand, though North America will come to rely more heavily on oil from members of the Organization of Petroleum Exporting Countries.

Exxon estimates global conventional oil reserves, or the amount of oil that can be produced through conventional methods, at 3.2 trillion barrels.

Nonconventional resources boosts the amount to 4 trillion, accounting for new discoveries and improved technology.

Through 2004, the energy industry has produced about 1 trillion barrels, leaving more than 2 trillion barrels of conventional resources still to be produced, Exxon said.

Peak oil

Only the U.S. has passed its peak oil production.

That's a point of contention among some energy experts.

In a hearing last week before the U.S. House Subcommittee on Energy and Air Quality, several experts and representatives testified that global oil reserves will peak in the next few decades, causing prices to rise dramatically and shifting more political power to oil producing countries.

So far, few decision-makers are paying much attention to peak oil theorists.

Rep. Tom Udall, D-N.M., and a member of the Congressional Peak Oil Caucus, called on Congress to develop a plan to cut oil use and move to a different fuel.

"The sooner we start, the smaller those sacrifices will be," Mr. Udall said, testifying that little is being done.

Exxon doesn't seem to expect such efforts to derail oil's dominance anytime soon.

The company predicted oil will retain the largest market share of the energy industry.

Oil and natural gas will still have 60 percent of the market by 2030, the company said.

The company stressed that technology to explore and produce oil is critical to meeting demand challenges.

The company also expects demand for natural gas and coal to rise, as demand for all kinds of fuel increases.

Wind and solar demand should rise by 11 percent a year during the next 25 years, but those fuels will serve only 1 percent of the market, Exxon predicts.

The company expects sentiment in the U.S. on nuclear energy to turn in the next two decades, boosting demand for nuclear fuel.

dws/bus/stories /DN-exxon_14bus.ART.State.

Monday, December 12, 2005

Planning for a future not dependent on oil

Seattle Times

By Kate Riley
December 12, 2005

Last week, I filled my trusty Honda's gas tank and happily noted the fall in gas prices eclipsed the 9.5-cent state gas tax I voted to keep.

But after a couple of days listening to energy experts, economists and investors talk about something called "peak oil," I fear a $2.16-a-gallon price is only a temporary respite.
Once the domain of wonky economists and think tanks, concern that world oil production is at or approaching its peak is gaining traction among America's policymakers. On the ascending side of the production bell curve, prices tend to be relatively low. But at the peak and on the downslope, they would rise precipitously.

Wednesday, the U.S. House Energy and Air Quality Subcommittee held the first congressional hearing on the idea of peak oil and what should be done about it. Last month, U.S. Energy Secretary Samuel Bodman asked a government advisory panel to study whether the world's oil and natural-gas production can continue to meet U.S. demand — and for how long.
It's an important question. The United States accounts for 8 percent of the world's oil production but consumes 25 percent. Sixty percent of U.S. consumption comes from foreign sources.

Competition for what is available is heating up — China recently surpassed Japan and is now the second-largest oil importer. It doesn't help that the majority of the world's proven oil reserves are in the volatile Mideast. Plus, it's difficult to know how much oil is available because some foreign producers aren't talking.

"We are sitting on the world's most incredible illusion — that the Mideast has an unlimited supply of oil," says Matthew Simmons, a Houston-based energy industry investment banker and one of President Bush's energy advisers.

Simmons points to the market response to the Gulf Coast's hurricanes as an indicator the industry's spare capacity is getting thin.

Gas prices near $3 a gallon, however briefly, have gotten people's attention. While federal energy legislation passed pre-Katrina offered little to reduce U.S. consumption, a bipartisan group of eight senators three weeks ago proposed legislation to do so.

Citing the need for energy independence and national security, the group led by Sen. Joe Lieberman, D-Conn., would require U.S. consumption to be cut by 10 million barrels a day within 25 years. The bill would provide incentives for alternative vehicles and fuels.

Congressman Jay Inslee, D-Wash., has proposed legislation with a more holistic view. His New Apollo Energy Project would establish energy performance standards, provide tax incentives and market-based assistance to create clean energy jobs while reducing greenhouse gas emissions and dependence on foreign oil.

Last week, at its annual meeting in Spokane, the Washington Public Utility District Association highlighted plug-in hybrid vehicles and alternative energy generation, such as wind, landfill gas, solar and tidal/ocean energy.

In January, the Snohomish County Public Utility District and the Cascadia Center hope to launch a regional discussion about the role of plug-in hybrid technology in solving some Puget Sound problems. The PUD's Steve Marshall suggests an expanded hybrid-vehicle technology could solve some of Puget Sound's transportation problems. Hybrid cars with extra batteries could be topped off by recharging on home electrical systems, further increasing mileage. Technology could limit recharging overnight when loads are low. Or free charging could be offered at park-and-ride lots to encourage more people to take the bus.

I don't know if world oil production is peaking, but I'm glad policymakers from the Bush administration to local utilities are fretting about it. Congress erred when it passed legislation that turned a blind eye to reducing oil consumption. America must plan for a future with less dependence on oil.

Kate Riley's column appears regularly on editorial pages of The Times. Her e-mail address is

Saturday, December 10, 2005

The Peak Oil Crisis: The Gulf Stream

Falls Church News-Press

By Tom Whipple
December 8, 2005

A couple of months back I discussed the North Atlantic Oscillation and how the British Meteorological Office was very concerned a flattening of the Atlantic's high and low pressure areas was going to make for an exceptionally cold winter in Northern Europe. This phenomenon also allows frigid Canadian air to make its way into the northeastern US resulting in higher prices for heating oil, diesel, gasoline, natural gas and nearly everything else. Winter is now two weeks away, and the British Meteorologists are still holding to their forecast of an unusually cold winter.

Last week, however, a new and more disturbing report was published by the Southampton Oceanography Centre in the UK concerning the stability of the Gulf Stream — a major heat source keeping Northern Europe from becoming Northern Siberia . It seems that since the last time they took measurements 12 years ago, the flow of fresh water from the melting of the north polar ice cap has interfered significantly with the Gulf Stream . Some 30 percent of the Stream’s warm water is no longer making it to the vicinity of Northern Europe , but is being diverted back towards the equator.

A drop of 30 percent in the flow should have been enough to cause an as-yet-to-happen drop in the average North European temperature. Some suggest the increasing world wide average temperature— global warming— is enough to offset the loss of heat from the Gulf Stream as far as Europe is concerned.

All this may only be an interesting (or perhaps not) academic debate, as not much seems to have happened to Northern Europe , as yet. However, what happens to the 30 percent of the warm water no longer making it to the North Atlantic ? I would like to thank Stuart Staniford of the web site The Oil Drum ( for explaining in detail that vast quantities of warm water are now flowing southward towards those regions of the Atlantic, the Caribbean, and the Gulf of Mexico where the hurricanes spawn.

Last week, the National Oceanic & Atmospheric Administration (NOAA) held a press conference on the 2005 Hurricane season. As we all suspected, the season shattered nearly every record ever kept about hurricanes. In short, it was two hurricane seasons rolled into one.

Moreover, NOAA says there is no relief in sight. The forecasters believe we are at the beginning of a 20-30 year era of increased hurricane activity. Now, if we learned anything from listening to those meteorologists describe the approach of all those hurricanes this year, it’s that warm water makes hurricanes and that very warm water makes very strong hurricanes.

In the last 15 months, three major hurricanes have slammed into our oil production facilities in the Gulf causing extensive damage. Six weeks after the last hurricane, about one third of Gulf oil production is still out of service. This new report that massive amounts of warm water are now flowing into the southward not only suggests, but screams, there are major troubles ahead. In the worst case, one or more hurricanes a year could slam into Gulf Oil production and refining facilities causing major production slow downs, very expensive and time-consuming rebuilding of facilities.

Work is already underway to strengthen our drilling rigs and production platforms to withstand the more powerful storms developing from the warmer water. But this is a slow process and hurricane seasons do not wait.

Looking beyond the oil industry, it’s obvious that year after year of numerous major hurricanes coming ashore along our southern coasts will quickly do serious damage to the US economy. At some point insurance (and therefore mortgages) for structures near hurricane prone shores simply will not be available.

The results of the recent survey were deemed so serious, oceanographers have moored a series of buoys across the Atlantic to continuously monitor the return flow of the Gulf Stream . In time, this continuous monitoring should answer the question of whether this shift in the Gulf Stream 's return flow is a short-term phenomenon or a long-term trend.

In the meantime, none of this bodes well for the price of oil and gas. A colder Europe will require more and more oil and gas to keep functioning, and frequent Gulf hurricanes will lead to a marked slowdown in oil production.

For now, there seems little we can do except to remember that the 2006 hurricane season is less than six months away.

Thursday, December 08, 2005

Lawmakers: US should prepare for global oil flow peak

Oil & Gas Journal

By Nick Snow
December 7, 2005

WASHINGTON, DC, Dec. 7 -- While there is disagreement about when world crude oil production will hit its peak, the US should begin preparing for it now, two US House members told an Energy and Commerce subcommittee hearing on Dec. 7.

Reps. Roscoe G. Bartlett (R-Md.) and Tom Udall (D-NM) led off the hearing before the Energy and Air Quality Subcommittee because they lead the House Peak Oil Caucus, which has six other members.

"We started it to bring immediate and serious attention to this issue. The continued prosperity of the United States depends on its ability to act on this," Udall explained.

Bartlett, who has given 14 special-order speeches before the House on the subject since March, cited Shell Oil Co. geologist M. King Hubbert's 1956 prediction that US oil production would peak around 1970.

"If he was right about our country, there's no reason to believe that he wasn't right about the world. He predicted that its oil production would peak about now," Bartlett said.

Domestic oil production has declined every year since 1970 despite higher prices and improved technology, he told the subcommittee.

"To provide a smooth transition to a more secure and sustainable energy future, we need to invest the effort and the money to use energy more efficiently while developing alternative and renewable sources, especially in transportation," Bartlett said.

Udall called for a government initiative comparable to developing the atomic bomb at the end of World War II and putting a man on the moon in the 1960s.

"Over the past 100 years, fueled by cheap oil, the United States has led the revolution in the way the world operates. Replacing this resource is imperative in continuing our way of life," he said.

Varying outlooksBut three witnesses on a second panel varied in their recommendations and assessments of the situation. So did several members of the subcommittee.

"The United States, with 5% of the world's population, should not continue to consume 25% of the world's oil production if other countries are to have their fair share," said Kjell Aleklett, a radiation sciences professor at Uppsala University in Sweden.

He added that a global effort will be necessary to address the peak-oil problem, and technologically advanced countries such as the US will have to take the lead.

Robert L. Hirsch, senior energy program advisor at Science Applications International Corp., Alexandria, Va., said SAIC recently concluded, in an analysis commissioned by the US Department of Energy, that a maximum effort will be needed to mitigate problems resulting from the world's hitting an oil production peak.

"The timing was left open because we don't know when it would occur," Hirsch said. "But if we wait until it does, the world will have a problem with adequate liquid fuels for more than two decades. If we initiate a program more than 20 years before it occurs, we have a possibility of avoiding the problem."

But a Cambridge Energy Research Associates official said a field-by-field analysis of worldwide production and development finds "no evidence to suggest a peak before 2020, nor do we see a transparent and technically sound analysis from another source that justifies belief in an imminent peak."

Robert Esser, CERA's global oil and gas resources program director, said many predictions of an imminent worldwide oil production peak do not include potential contributions from natural gas.

They also rely heavily on exploration and production data companies file with the Securities and Exchange Commission that are overly conservative because they don't consider the contribution of improved technology, he said.
The fourth scheduled witness in the second group, Murray Smith, minister-counselor for Alberta at the Canadian Embassy in Washington, DC, submitted written testimony but was called away before he could speak.

Impact of technologyThe potential contribution of improving technology was a major area of disagreement, in terms of both increasing oil recovery and developing alternatives.

Hirsch said hydrogen looks technically but not economically feasible because breakthroughs still are needed in fuel cells and onboard storage. "We took an optimistic view, but don't bet on it. The things that are essential don't exist now," he said.

He sees more potential in coal-to-liquids conversion because it can be done with commercial technology. "In addition, the carbon dioxide that's produced can be used for enhanced oil recovery," he said.

Aleklett conceded that ultradeepwater oil production is making an increasing contribution to supply. But he added that Brazil, which many consider the world's leader in that effort, has found about 12 billion bbl of oil in deep water, which is not much in comparison to the world's annual total consumption of 30 billion bbl.

"Right now, there is no more intense exploration play in the world than Canadian oil sands," Esser said.

"Companies are struggling to get into the play, buying interests from others who are running short financially. The ones that are there are expanding their projects to bring production on sooner. We see oil sands out to 2020 up to about 4 million b/d, up from the current 1 million b/d. By 2030, we see production reaching 6 million b/d."
But Bartlett said the Canadians are using more energy from gas to retrieve oil from tar sands than they are producing in btu terms, which is economically inefficient unless it involves gas that would be stranded otherwise.

Aleklett said the Canadians are exploring nuclear power as a possible alternative.

Esser pointed out that technology already has reshaped US gas production. "Ninety percent of the natural gas drilling in this country now is toward unconventional sources such as coalbed methane and tight sands gas. Gas-related drilling has never been higher, but we don't see any way to turn around declining US production. We'll have to import liquefied natural gas," he said.

"But we could do more by improving access," the CERA official continued. "There are several instances where companies were awarded offshore leases and not allowed to develop them, such as [Gulf of Mexico Lease] Sale 181 and the Destin Dome. Access to promising lands in the Rocky Mountains also can be impeded at every step. Nobody seems interested in doing anything about this."

Contact Nick Snow at

Tuesday, December 06, 2005

Article Excerpt

Wall Street Journal

Corporate Social Concerns:Are They Good Citizenship,Or a Rip-Off for Investors?

December 6, 2005

MS. HOGUE writes: The world will have to grapple with energy efficiency and energy consumption in a real way if we are to achieve goals of poverty alleviation and ecologically sound energy sources. We appreciate the bank policies that create incentives for energy efficient mortgages allowing customers to take advantage of the cost savings associated with efficiency. Yet we have to be honest that the U.S. consuming 25% of the world's energy while housing only 5% of the world's population is not valid model for replication. These resources are finite.

Even Exxon Mobil recognizes that peak oil is a reality; oil will run out. It is not "if," but "how" we will transition to a renewable energy economy. This economy will necessarily embrace efficiency models as well as a level playing field that enables real competition for all energy sources, rather than favoring the fossil fuel industry to the tune of billions a year.

What is exciting are the opportunities offered by this transition. Leading thinkers, like writer Ross Gelbspan and economist Eban Goodstein, have identified that with anticipation and planning; the coming energy transition will create new jobs and stimulate the economy. Perhaps more importantly, renewable energy sources can put control of energy sources back in the hands of national and local populations.

It is time to smash the myth that fossil-fuel extraction benefits local populations. MNCs, like Shell, Chevron, Exxon have been operating in resource rich (oil, timber, minerals) countries for decades, yet large scale extraction projects are strongly linked to higher poverty rates and increasing national debt that robs key resources better used for education, health care, and building local economies. Even the World Bank's Extractive Industry Review recommended no more funding for fossil-fuel projects because it runs directly counter to the goals of poverty alleviation. Look at Ecuador, look at Nigeria, look at the Congo.

MR. SMITH writes: As always in these discussions, the issue of transition is important but whether we should rely on politicians to make these u-turns or consumers and suppliers is the better issue. Government has already wasted vast sums in seeking energy alternatives, in seeking "energy independence." I was at EPA when the Synfuels programs began to absorb its billions of taxpayer dollars -- years later it produced a few barrels of oil.

GE and Exxon Mobil, for that matter, invest large sums to ensure that they'll be prepared regardless of which outcome emerges. That is intelligent but they need not disparage the existing technologies that are producing great good for mankind now.

I once joked that the thoughtful "responsible citizens" of California had elected to cease their reliance on the horrible energy sources of hydropower, fossil fuel and nuclear -- all of which were terribly environmentally destructive. California, they decided, would rely on electricity instead. If American firms are forced into economic production and distribution and marketing programs that will please RAN, NOW, the AFL-CIO or Amnesty International, there won't be much economy left.

Monday, December 05, 2005

Area teachers form outpost to examine peak oil

Peoria Journal-Star

By Jessica L. Aberle
December 4, 2005

Group to host documentary, 'The End of Suburbia,' at Downtown Peoria library

PEORIA - Doug Day wonders, even worries, about what life will be like without fossil fuels. He believes other people need to start thinking about it too.

Day, a theater instructor at Illinois Central College, along with his partner and fellow history professor at the school, Dave Thompson, have formed the Peoria-area Post Carbon Outpost for the discussion of issues related to the concept of peak oil and life after fossil fuels.

"I heard an author interviewed on the radio last June, and I went out and bought his book and have been kind of thinking about it ever since," Day said of peak oil, the idea that at some point the rate of oil production will no longer be able to increase and therefore be unable to satisfy demand. "When I heard this author interviewed what he was saying was fitting in with my view of things, so I reacted positively. Some other people might react skeptically."

Day and Thompson want to take their new found passion to the local masses and educate people on what can be done now to lessen the effects of post-carbon life later. The local outpost will host a free screening of the movie "The End of Suburbia," a documentary on peak oil, at 7 p.m. Dec. 13 at the Downtown Peoria library auditorium.

"We're just trying to get the word out on peak oil and we think this documentary is a good way of doing that."

The movie is distributed through the Post Carbon Institute, an initiative and operating unit of MetaFoundation, a not-for-profit organization chartered in Portland, Ore. The Institute is an educational institution and think tank that explores in theory and practice what cultures, civilization, governance and economies might look like without the use of (non-renewable) hydrocarbons as energy and chemical feedstocks.

Day said recent Journal Star articles on the Illinois coal industry raise questions about the United States' ability to institute poly-product coal gasification plants soon enough to lessen the economic and cultural affects of peak oil and offer a transition period to better develop forms of renewable energy.

Some subscribers to the concept of peak oil believe the world is in the midst of peaking, others believe it will happen in the next decade, while most experts agree it will definitely happen within the next 30 to 40 years. Regardless, there is no argument that oil and all fossil fuels - including natural gas where shortages are becoming evident, and coal which remains plentiful and America's largest resource - are all finite resources, Day says.

The auditorium will seat up to 200 people and Day and Thompson will be available for discussion following the viewing. Depending on interest, the pair are considering offering additional showings.

Day hopes the movie starts people thinking.

"The question would be this, how quick can we bring coal on as a replacement?" he asked. "If we're going to be entering this peak within the next 10 years how are we going to replace cheap gasoline and oil. We don't have a plan B."

Day contends there is no way, currently, to replace America's dependence on oil in the time available. "We're going to feel it, and we're feeling it right now with our heating bills. I mean it's started," he said, adding currently the United States is importing 15 percent of its national usage from Canada. And that 15 percent represents 50 percent of Canada's national output.

Peak oil will happen worldwide within the next 15 years, Day says. "Some people say we've already hit it.

"I don't know," Day said. "Forty some countries have hit oil peak. The United States hit in the early '70s and that's a well-known fact. ... There has been no other major discovery of oil for years and years and years. Britain, I think this year, will become a net oil importer rather than an exporter.

"The geologists are basically saying that this idea of peak (oil) is going to happen. And these are oil geologists."

For more information on the Peoria-area Post Carbon Outpost or the showing of "The End of Suburbia" contact Day at 694-5149.

Saturday, December 03, 2005

Congressman backs post-oil planning: Thompson says Willits can set national example

The Willits News

By Claudia Reed
December 2, 2005

WILLITS "We can't keep going the way we've been going," said Congressman Mike Thompson. "That's a no-brainer."

Speaking during Monday's meeting with local officials and members of the Willits Economic LocaLization (WELL) group, Thompson was referring to an economy based on insatiable consumption of fossil fuels. The United States, he said, comprises about 6 percent of the world's population, but consumes at least 25 percent of its oil, most of which is imported.

"Congress has a responsibility to take the U.S. away from foreign (fuel) dependency," Thompson said.

The U.S. Department of Energy currently predicts the condition of peak oil (the time when demand outstrips supply) will begin in 2036. Thompson joined WELL's Phil Jergensen in calling the timeline overly optimistic.

Thompson charged the date was set in order to allow time to win the current U.S./China competition over a dwindling oil supply, rather than to prepare for a post-oil economy. President George W. Bush's energy policy, he noted, calls for heavy subsidization of the oil industry and relatively little incentive for development of sustainable energy sources.

Keith Rutledge, who has acted as consultant to such clients as the City of Sacramento in the transition to renewable energy, compared federal energy policy with burning the wood on the Titanic for heat, rather than using it to build life boats. He called for using existing oil resources to build the infrastucture needed for a post-oil economy.

Mendocino County Supervisor Hal Wagenet suggested calling the DOE's bluff by asking for funding and incentives to begin the full-scale development of alternate energy systems that must be operational in another 31 years.

In the meantime, Thompson strongly supports renovation and use of California's North Coast Railroad Authority lines in order to reduce the number of gas and oil guzzlers on the road. He said he's taken flack for his position from those who call the project, pegged at between $60 million and $200 million, too expensive.

The question remains: too expensive compared to what?

"Abandoning the lines," Thompson said, "a job that includes disposing of the creosote-soaked rail ties, could cost as much as $2 billion."

Repair and expansion of roadways impacted by heavy truck traffic, he added, also runs into the millions of dollars. Thompson recommended reducing truck traffic by promoting an active connection between smaller ports and rail lines. Larger ports, he said, are already at capacity.
WELL co-founder Dr. Jason Bradford pointed out the cost of the future Willits bypass is currently estimated to be at least $150 million.

Several of those taking part in the discussion noted a historic preference for roadways over rail lines on the part of both federal and local agencies. Thompson said longstanding connections with road builders may be influencing the viewpoint.

Turning from transportation fuels to energy sources for homes, local governments and businesses, Thompson noted the administration's energy plan, which authorizes an additional oil industry subsidy of $1.5 billion, also authorizes expenditure of about $800 million for development of alternate energy. He promised to look into ways to send some of that money this direction.

"We could use it here," said City Councilman Ron Orenstein, who chairs an ad hoc committee on development of sustainable energy systems for city buildings and operations.

Thinking aloud, Thompson suggested federal incentives aimed directly at establishing renewable energy cities.

Meeting participants discussed ways to expand city-owned renewable energy systems to the private sector. Possibilities include city ownership and maintenance of solar panels and other generating equipment that could be rented or leased by homeowners.

Madelyn Holtcamp of the Economic Development and Financing Corporation said city-owned utilities can make different decisions on serving the public because they don't have to provide profits for stockholders.

With or without a city-owned utility, Kevin Erich, president of Frank R. Howard Memorial Hospital, said his facility's new building complex would comprise the first rural green hospital in the country.

"I really believe renewable energy (use and production) can create jobs," said Janet Orth of Willits Renewable Energy Development Institute.

Thompson agreed. He offered to help develop something that can work for this area in making the transition to a post-oil reality.

"If we do," he said, "we can get something that will work for the rest of the country.",1413,91~3089~

Governor Pataki Increases Use Of Biodiesel For New York; Peak Oil Reality Picks Up Momentum By Federal Government

Business Wire

December 2, 2005

BAKERSFIELD, Calif.--(BUSINESS WIRE)--Dec. 2, 2005--E-Wire--Green Star Products, Inc. (OTC:GSPI) today announced that last week November 20, 2005, Governor George E. Pataki announced a major initiative to increase the production of biofuels in New York State as part of a comprehensive plan to develop and expand markets for ethanol and other biofuels, and help reduce our dependence on foreign energy sources. The Executive Order includes mandates that by 2007, at least 2 percent of fuels used in the State fleet must be biodiesel, with this percentage rising to 10 percent in 2012.

This is another great step in bringing biodiesel into the mainstream fuel distribution system. This announcement follows two other recent important Legislation Bills signed by Gov. Schwarzenegger of California to further the use of biodiesel. See press releases dated Jul 20th and October 4th 2005 by GSPI.

Joseph P. LaStella, P.E., President of GSPI stated, "Biodiesel is becoming a household word very quickly and production of biodiesel is expanding by margins not predicted by anyone even as recently as one year ago. US production of biodiesel in 2005 will be 200% higher than 2004. Biodiesel is gaining prestige as a domestic renewable fuel while the phenomenon called 'Peak Oil' is becoming a national controversy."

'Peak Oil' is a point in time where crude oil production reaches its maximum output and begins to decrease while demand continues to increasingly exceed production.

Mr. LaStella stated, "The need to increase US production of biofuels is directly related to the 'Peak Oil' problem."

On November 25, 2005, USA Today published an article titled, "Can Oil Production Satisfy Rising Demand?"

The USA Today article quotes a Chevron Ad: "The world consumes two barrels of oil for every barrel discovered. So is this something you should be worried about?"

The USA Today article also states, "Energy Secretary Samuel Bodman has asked a high-level advisory board to answer one of the toughest questions dogging the U.S. economy: Can world oil production meet steadily rising demand?" The article further states, "Avoiding economic turmoil will require more than a decade of 'intense, expensive effort,' according to a February study by Science Applications International for the Energy Department. The U.S. would need to build alternative fuel plants and greatly increase vehicle fuel efficiency."

Mr. LaStella also states, "Peak Oil is not a case of 'if' it is going to happen, only 'when' it will happen."

The concept of when it is going to happen is at the center of the controversy. A review of the data from respected industry sources reveals some startling factors. For example: the US consumes more crude oil than the next five top industrial nations combined. However, further illustrating the problem the US is not listed among the top ten nations with proven oil reserves.
In fact, Saudi Arabia has twice the oil reserves as any other nation. Additionally, almost 50% of the world's proven oil reserves reside in Saudi Arabia, Iran and Iraq. This is not a good position for the US to be in.

Another impending question is: How much oil do the Saudi's actually have left to support world demand?

Mathew Simmons is author of a recent book that questions the extent of Saudi Arabia's oil reserves. What Simmons discovered tells a different story than conventional wisdom.

"Simmons analyzed 200 technical papers on Saudi reserves by the Society of Petroleum Engineers."

"Saudi Arabia has over 300 recognized reservoirs but 90% of its oil comes from the five super giant fields discovered between 1940 and 1965. Since the 1970s there haven't been new discoveries of giant fields. The most significant of the oil fields is Ghawar. Found in 1948, the 300-mile-long sliver near the Persian Gulf is the world's largest oil field and accounts for 55%-60% of all Saudi oil produced. Ghawar's current proven reserves are 12% of the world's total. The field produces 5 mbd, which is 6.25% of the world's oil production. According to Simmons, Ghawar's northern regions are almost depleted. Two other giant fields, Abqaiq and Berri, also seem to have peaked in the 1970s."

"To meet global demand for oil, Saudi Arabia will need to produce 13.6 million barrels a day (mbd) by 2010 and 19.5 mbd by 2020."

The report further states:

"Saudi Arabia's oil fields now are in decline, that the country will not be able to satisfy the world's thirst for oil in coming years and that its capacity will not climb much higher than its current capacity of 10mbd. Considering the growth in demand, this could easily spark a global energy crisis."

While the Simmons Report paints a dismal view of the ability to meet increasing demand for oil, another report by Senator Roscoe Bartlett, R-Md, even goes a step further and scientifically reviews the possible alternative energy sources that may supply the world's energy needs.
Senator Bartlett earlier this year presented his in-depth study concerning Peak Oil on the floor of the Senate (see website and met President Bush this summer to urge government action.

Many people scoff at the Peak Oil Theory. However, the Bartlett Report addressed all of the issues and confronts them with scientific data, not with wishful dreams. Consider just a few factors that Peak Oil Theory opponents often cite as possible cures, which are essentially flawed, for our energy problems:

1) The US has coal reserves for 250 years. This is not correct. Cars and trucks do not run on coal. Coal would have to be turned into liquid or gas to be a viable solution. This conversion requires a huge amount of energy for conversion and will require hundreds of billions of dollars to build energy conversion plants to make a difference, not to mention the time for construction and environmental hurdles it would encounter. Additionally, when considering the input energy requirement and calculating only a 2% growth rate for energy consumption the coal reserves would be exhausted in only 50 years. In conclusion, coal reserves will not be able to bridge the energy gap but they will help.

2) Raising prices of oil will stimulate oil exploration and this argument is used to open up wildlife-protected areas to new exploration. This is not a solution at all. Lets consider the existing Alaska pipeline, which was suppose to be an answer to US future energy needs. The Alaska pipeline only produces 5% of the present US requirements of oil. Further, the public does not know that part of the Alaska oil is shipped to Asia not the US because the US does not have the refinery capacity on the west coast to accept Alaska's production.

It is important to note that the Bartlett Report cites the fact the US production of crude oil hit its Peak Oil production in 1970 and has heavily relied on imported crude since. The world is now facing the same Peak Oil crisis with no safety net.

3) Canadian oil sands have been cited as a possible solution because of its oil reserves, that is the good news. The bad news is tar like sands require enormous amounts of natural gas and water to extract its oil in a hostile environment requiring huge capital investment.

Kenneth Deffeyes, a Princeton University Professor Emeritus of Geosciences, calls the talk of substantial tar sands production a "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." (See USA Today October 17, 2005).

A 96-page study prepared in February 2005 from the Department of Energy (DOE) concluded: "The world is fast approaching the inevitable peaking of conventional world oil production (a problem) unlike any yet faced by modern industrial society."

4) The Bartlett Report states that none of the alternative fuels by themselves can affect the coming Peak Oil crisis. However, we desperately need all of them to ease the transition period. Solar, wind, geothermal, biomass, oil shale, tar sands, ethanol and biodiesel, and of course, the most important: conservation.

Some people think hydrogen is the answer. Hydrogen is not an energy source it is only an energy transmitter. It takes a real source of energy to make hydrogen. Any of the previous mentioned energy sources can make hydrogen. Hydrogen is not a solution to the world energy problem.

In summary, it is note worthy to group the energy sources in certain categories to identify other important factors at work.

Solar, wind and geothermal energy plants are capital intensive and will require huge investments and considerable time to make a significant impact. All of the other energy sources, except biodiesel, have a negative energy output, which it means it takes more energy to produce them than is contained in the final product. For example, it takes more energy to produce a gallon of ethanol than it contains in the final gallon of ethanol.

Only biodiesel has a positive energy flow. For every unit of energy it takes to make a gallon of biodiesel it produces 3.5 units of energy in the biodiesel (see reference NBB web site Furthermore, biodiesel plants require much less capital investment to construct and can be built in a shorter time frame than other plants with minimal environmental impact.

Mr. LaStella stated, "biodiesel is not the only solution except it is one of the most viable."
This is why American Biofuels has now teamed up with Energy Merchant Marketing Co. Energy Merchant Corp. ( is managed by Industry Experts who have been among the largest independent marketers of petroleum products since 1978. See GSPI press release dated December 1, 2005, "Energy Merchant Marketing Company Enters into a Multi Year Agreement with American Biofuels."

Green Star Products, Inc. is an environmentally friendly company dedicated to creating innovative cost-effective products to improve the quality of life and clean up the environment. GSPI is involved in the production of renewable clean-burning biodiesel and other products including lubricants, additives and devices that reduce emissions and improve fuel economy in vehicles, machinery and power plants. For more information, see GSPI'S Web site at or call Investor Relations at 619-864-4010, or fax 619-789-4743, or email Information about trading prices and volume can be obtained at several Internet sites including and under the ticker symbol "GSPI."

Forward-looking statements in the release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including without limitation, continued acceptance of the company's products, increased levels of competition for the company, new products and technological changes, the company's dependence on third-party suppliers, and other risks detailed from time to time in the company's periodic filings with the Securities and Exchange Commission.

Thursday, December 01, 2005

Couple take reins in world oil crisis

The Grand Rapids Press

By Julie Makarewicz
December 1, 2005

WAYLAND -- One couple is taking it upon themselves to find out more about the world oil situation and what can be done about it.

Aaron Wissner, a Wayland Middle School teacher, and his wife, Kimberly Sager, are worried about world oil production and the impact it is having here.

So, the Barry County couple decided to get involved.

For starters, they attended the World Oil Conference, sponsored by the Association for the Study of Peak Oil and Gas, in Denver.

At their home, Wissner and his wife have installed new window treatments and new lights and are planning to add solar panels.

"My feeling coming away from this is one of urgency," Wissner said.

"This is a very real situation and real issue that will affect everyone. We all need to realize there are going to be changes."

Wissner is sharing his sense of urgency in a discussion at 7 p.m. today at the Wayland Union High School auditorium and at noon Friday to the West Michigan Environmental Action Council.
While experts differ on many issues, they all seemed to agree at the conference that world oil production will peak within two to 10 years.

"Mainly, we need to start reducing per capita energy use," said. "That means making changes.
"And we need to start looking at finding ways to use renewable resources for our needs."

As oil production peaks, if demand doesn't decrease, prices will increase. That eventually will lead to price increases for all goods transported throughout the nation, Wissner said.

Individuals can do their part by reducing oil consumption.

That means sharing rides, combining trips and considering working closer to home. It also means energy reduction at home, including installing energy-saving curtains or blinds, turning down the thermostat, turning off lights and appliances when not using and switching to higher-efficiency lighting and items.

Wissner is certain the oil situation is going to cause changes in the world.

"It's real. It's going to happen, and it's going to affect the way we all live and work," he said.
"People need to start looking at this seriously and doing what they can now. There's no way around it. ... We are all going to be in this together, and we are going to have to find ways to deal with it."

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