Weekend Roundup  

The Herald has a good article this weekend called "Energy To Burn", which includes some revealing quotes from the liberator of the Northern Territory's uranium, Ian McFarlane. Energy Bulletin notes "The reporter seems to be getting it, even if the Federal government isn't; that last quote from the Federal Minister Macfarlane is priceless". The solution to running out of oil ? Finding more oil !

The noise over high fuel costs, dirtier air and a trade deficit blowout is getting louder. But the people who matter don't seem to be listening, writes Christopher Kremmer.

This week the Government stonewalled public concern about high fuel costs, its belief in market forces transcending its populism. Even those who agree that cutting fuel excise is not the answer say there's a lot the Government should be doing but isn't.

The former president of BP Australasia, Greg Bourne, who is now head of World Wildlife Fund-Australia, said rigid free-market orthodoxy could be dangerous if it inhibited policies aimed at reducing dependence on expensive imports and building energy security.

"Greater energy security and resilience to oil shocks requires political leadership," Bourne said. "We need tax and other incentives to make people use more gas at home and in our cars. Bringing North-West Shelf gas onshore for domestic use is probably the most important option we have to rapidly build resilience."

Yet we're shipping our gas abroad as fast as the freighters will carry it, while domestic oil production is in free fall. On current estimates, Bass Strait supply will be exhausted in nine years.

In February a report to the United States Department of Energy outlined how messy the consequences of not properly managing the transition to a post-oil future could be. "Waiting until world oil production peaks before taking crash program action would leave the world with a significant liquid fuel deficit for more than two decades," an analyst, Robert Hirsch, told the Bush Administration in his report.

"Intervention by governments will be required, because the economic and social implications of oil peaking would otherwise be chaotic."

Within the Howard Government there seems little sense of urgency about the cost or security of our energy supplies. Beyond meeting the International Energy Agency's requirement that countries maintain a 90-day oil reserve, Canberra has no plans to build a stockpile, like the kind that acted as a buffer to the Hurricane Katrina-struck US.

"At this stage Australia's fuel security is still good," Macfarlane said. "Do we need to find more oil? Yes we do. But short of finding more oil I don't know what the solution is."

Independently minded Nationals Senator Barnaby Joyce even weighed in with some sensible words on nuclear power in the article, noting that if you haven't solved the waste disposal problem you shouldn't be trying to raise the issue at all.

despite the recent flurry of statements by Government ministers calling for nuclear energy to be considered for Australia, Macfarlane said it's at least 20 years away. Opponents such as the Greens' Senator Christine Milne -"You can't escape the weapons and waste" - find themselves with strange bedfellows, including the Nationals maverick Senator Barnaby Joyce, who said: "We should work out what to do with the nuclear waste we've got stored in Sydney, before moving deeper into the nuclear fuel cycle."

Bourne describes Canberra's leadership in preparing for an oil-scarce, carbon-constrained economy as "abysmal", but also says environmentalists and "flat-earthers" need to get real. "It's no use pointing to nirvana if you can't show in practical terms how an advanced economy like Australia can get there," he said. "Greens will typically say, 'No nuclear. Oh, and by the way, switch off all hydrocarbons tomorrow and install solar cells immediately.' Flat-earthers just deny there's a problem."

The first oil shock of the 21st century has begun. As The Economist recently pointed out, oil prices are at an all-time high relative to global export prices - the key indicator for oil importing economies.

Australian Investors Review has a report out on the local uranium industry which goes into some detail on current uranium production and locations of prospective new mines.

Deputy PM Mark Vaile has followed in John Anderson's footsteps in more ways than one, saying that the age of cheap oil is ending.

In a ironic twist, warmer than normal temperatures are impacting production on Alaska's North Slope. Maybe the Earth eventually acts as a self correcting system (before the ultimate self correction the hardcore apocaphiliacs are predicting that is) - with high temperatures slowing down polar production and hurricanes destroying tropical production and refineries.

On the other hand, global warming may open up more polar offshore areas for drilling - with some reports already tipping that there may be some big fields to be found in the Barents sea (there is plenty of activity on Sakhalin Island already).

In other global warming related news, Past Peak has a post up on an article in The Independent that asks if the Northern Hemisphere is past the "Point Of No Return".

More and more often now, we read reports that global warming is accelerating faster than scientists had ever anticipated as feedback loops kick in. Here's another such story. This is the sort of thing that ought to be in the foreground of everyone's awareness, but won't be. We just don't have the attention span. Not yet anyway. The Independent:

A record loss of sea ice in the Arctic this summer has convinced scientists that the northern hemisphere may have crossed a critical threshold beyond which the climate may never recover. Scientists fear that the Arctic has now entered an irreversible phase of warming which will accelerate the loss of the polar sea ice that has helped to keep the climate stable for thousands of years.

They believe global warming is melting Arctic ice so rapidly that the region is beginning to absorb more heat from the sun, causing the ice to melt still further and so reinforcing a vicious cycle of melting and heating.

The greatest fear is that the Arctic has reached a "tipping point" beyond which nothing can reverse the continual loss of sea ice and with it the massive land glaciers of Greenland, which will raise sea levels dramatically.

You just have to marvel at the perversity of a society (ours) putting a bunch of greedy, ignorant, immature, anti-science know-nothings (Bush, DeLay, et al) in charge at a time like this, when our very survival is going to depend on mature, visionary, science-based cooperative action.

Most of us tend to think of problems like global warming and the end of cheap oil as being somewhere off in the distant future. But these problems are upon us — right now. It's time to wake up, grow up, and get busy. Denial and delay will be deadly.

There has been a swathe of reports in the past few days about the linkage between global warming and increased strength of tropical cyclones - the Herald's effort is called "As the world warms the tempests rage harder".

WorldChanging has been following the "Clinton Global Initiative" in some detail, and has a report on European insurance industry efforts to drive adoption of renewable energy (maybe the airline industry should be contributing to this too) - "Swiss Re Invests Millions in European Clean Energy".

Swiss Re's announced a commitment to launch a European Clean Energy Fund that'll attract institutional investment money into clean energy and low carbon investments in Europe. The fund is expected to reach $300 million (250 million Euros) -- Swiss Re itself commits up to 20 million Euros to the fund, which will be a joint venture other asset managment firms. The fund will target wind, biomass, co-generation, combined heat and power, energy efficiency, geothermal, and hydro power.

Even the one environmental disaster in the making that we have taken action on is still not improving, with reports are saying that the hole in the ozone layer over Antarctica is near record size.

Rigzone has a report called "100-Year Storm Standards for Platform Criteria May Be Revised" which includes the following quote from a Unocal representative "We're seeing more 100-year events happening more often, even every few years", which would be almost funny if there weren't so many casualties in New Orleans as a result of this effect.

Around the world, offshore oil and natural gas platforms are generally built to survive without serious damage a so-called 100- year storm a hurricane so powerful that it typically occurs only once every 100 years.

Hurricane Ivan roared through the Gulf of Mexico a year ago, generating the highest waves ever recorded there in a storm considered likely to occur only once every 2,500 years. Given the scale of the hurricane, it was inevitable that it would wreak havoc on the Gulf Coast, the biggest U.S. energy-producing region, uprooting long stretches of underwater pipelines, wrecking seven platforms and crimping production for six months.

But when industry executives, engineers and oceanographers gathered at an American Petroleum Institute conference in Houston in July to discuss how to improve the gulf's infrastructure, they expected to have plenty of time to work on the problems. Then Hurricane Katrina struck, just before the end of August.

On the subject of New Orleans, TomDispatch has a couple of good articles out - one on the disaster industry feasting on the ruins ("The Reconstruction of New Oraq") and one on the environmental policies that contributed to the disaster ("Bush's Holy War on Nature").

When Katrina hit, it blew away yet another administration-managed scrim of irreality. First for scores of reporters and then for millions of Americans, it connected so many things (including what was happening in Iraq and here) that might otherwise have remained unlinked for months or years more. It suddenly revealed, at an extreme, the world Bush has made for us. New Orleans is now a vast toxic dump (and, as at Ground Zero in New York after 9/11, a toxic cover-up is sure to follow, endangering relief workers today and returning residents tomorrow); the city's embattled wetlands are in dismal shape; a superfund toxic waste site remains underwater; the whole area may prove an "underwater Love Canal"; parts of the Gulf of Mexico are now covered with huge, if unacknowledged, oil slicks; and much of the damage, long and short-term, had a human hand associated with it.

A Chinese delegation has met with Hugo Chavez in Caracas, with Venezuelan oil exports to China to predicted to grow up to 100 million barrels per year (for a while anyway). Since then, Hugo has apparently been putting Bush to shame at the UN summit in New York. Apparently Hugo has an hour long interview up at "Democracy Now" as well.

Taking the U.N. by storm, a successful oilman from Venezuela berates an unsuccessful one from Texas.

Hugo Chávez, speaking at the U.N. Thursday, showed George W. Bush how to use a bully pulpit. Following Bush by a day, the Venezuelan president generated the loudest applause at the biggest gathering of world leaders in Planet Earth's 4.55-billion-year-history.

The Miami Herald's Pablo Bachelet wrote that Chávez "used his fiery oratory to blast his way into New York's limelight." (The Times was apparently too blinded by the glare to run anything.) Bachelet added that Chávez, who was allotted five minutes to speak, clearly had more to say:

When a diplomat handed [Chávez] a note telling him he had gone over the allotted time, Chávez tossed it away, saying that if Bush could speak for 20 minutes, he could too. He spoke for 22 minutes.

Bloomberg has a report saying that global demand for oil is now falling, but some analysts are still predicting that oil prices will hit US$100 a barrel in 2007.

Oil may average $84 a barrel next year, $93 in 2007, and $100 in the fourth quarter of 2007, as demand outpaces supply, Canadian Imperial Bank of Commerce's chief economist said, jumping ahead of other analysts who are trying to catch up with surging prices.

Rising consumption in China is straining supplies, and damage from Hurricane Katrina to Gulf of Mexico facilities will delay new oil projects in addition to cutting output now, Canadian Imperial's Jeffrey Rubin wrote in a Sept. 7 report. Global supply will be as much as 2.4 million barrels below projected demand by 2007, and the gap will only be closed as rising prices slow demand growth, Rubin wrote.

Chinese Demand

``About 42 percent of the growth in global demand is coming from China, where there is virtually no price sensitivity to demand,'' Rubin said in a separate phone interview. ``There's a huge relationship to income growth there, but a very uncertain relationship to price at all.''

The International Energy Agency today said oil demand is being reduced by record prices. The agency cut its estimate of 2005 world oil demand growth for a third month, citing slower fuel sales in China, Thailand and other Asian countries.

Chinese demand for oil to fuel the fastest-growing major economy in the world is expected to rise 3.4 percent this year, down from 15 percent last year, agency said in a report today. The country's appetite for crude is forecast to expand 7.5 percent in 2006, according to the agency, which advises 26 industrialized nations.

Lack of Supply

The supply needed to meet rising global oil needs will not be coming, according to the CIBC economists. Members of the Organization of Petroleum Exporting Countries have ``limited'' opportunities to boost output, and increases in Russian production appear to have reached a plateau, Buchanan said. OPEC pumps about 40 percent of the world's crude oil.

Hurricane Katrina exacerbated the supply crunch by damaging platforms and delaying output from fields such as Thunder Horse, Atlantis and Tahiti, the report said. The Gulf accounts for about 30 percent of daily U.S. oil output and 24 percent of gas production.

Royal Dutch Shell Plc, the biggest oil producer in the Gulf of Mexico's deeper waters, today said output from the Mars field and nearby sites may be shut for the rest of the year because of Katrina.

Jeff Vail has a post up explaining why "High Oil Prices are Good for Bush". His book "A Theory Of Power" has also been posted in PDF format.

Energy Bulletin picked up a good bit of analysis (pdf) by the RAND corporation that notes that it will take 20 years before oil production from oil shales will exceed 1 million barrels per day (even if we ignore all the environmental devastation this would cause). They also have some excerpts from a report by the Canadian Club Of Rome on "The Age of Oil".

Indonesia and ExxonMobil have finally concluded negotiations on development of the Cepu field in Java.

"Toward Freedom" has an interview with Mike Ruppert on peak oil which is rather gloomy.

RW: You’ve suggested, in your writings and talks, that American political culture is more and more resembling fascism. What recent evidence do you see?

MR: The list of things happening within the U.S. is truly frightening, in terms of both volume and speed. Congress is moving to throw out the 25th Amendment, which imposes a two-term limit on sitting presidents; the FBI can now issue its own subpoenas, without court involvement; It has just been proposed that U.S. military intelligence should work with local law enforcement agencies to weaken "posse comitatus"; Congressman James Sensebrenner has now introduced legislation—HR 1528—to impose a mandatory five-year prison sentence for failing to inform on family members or friends guilty of marijuana possession or minor drug use; I predict we will soon see a national draft, and Canada will not harbor U.S. deserters as it did during Vietnam, as it is now a virtual U.S. colony. The list goes on and on.

RW: Paint a picture of our near-term future.

MR: We’ll see major blackouts, the dollar will collapse, we’ll experience massive unemployment, the housing market will tank, and there will be a national "fire sale" as people and businesses are stripped of their assets. My best financial advice, acknowledging that there is no "one size fits all" plan, is to stay liquid, get out of debt while you still can, and decide if your most valuable assets, including your own home, are worth hanging on to. If your home is on a few acres with running water and rich soil, then sit on it. If it’s a condo in downtown Manhattan, you might consider moving.

Iran seems to be ready to cross a Rubicon of its own, with the Herald reporting "Iran throws down gauntlet in nuclear row". It appears the Iranians are feeling confident that the US won't be able to manage an invasion now - which is probably partly due to the evidence of US military overstretch that has been manifested lately in both Iraq and New Orleans, along with fairly obvious Chinese backing - Iranian energy sales to China and India could almost be considered a form of protection payment.

Australian journalist John Pilger (one of those old-school lefties whose media profile has almost completely disappeared over the past 20 years) has an interesting article out called "News from Behind The Facade" which includes some references to the always educational "Grand Chessboard" by Zbigniew Brzezinski.

Behind The Facade, the destruction of democracy has been a long-term project. The millions of poor, like most of the people of New Orleans, have no place in the American system, which is why they don't vote. The same is happening under Blair, who has achieved the lowest voter turnouts since the franchise. As with Bush, this is not his concern, for his horizons stretch far. Selling weapons and privatization deals to India one day, preparing the ground for attacking Iran the next. Under Blair, the Secret Intelligence Service, MI6, ran Operation Mass Appeal, a campaign to plant stories in the media about Saddam Hussein's weapons of mass destruction. Under Blair, young Pakistanis living in Britain were trained as jihadi fighters and recruited for the first of his wars - the dismemberment of Yugoslavia in 1999. According to the Delhi-based Observer Research Foundation, they joined this terrorist network "with the full knowledge and complicity of the British and American intelligence agencies."

In his classic work, The Grand Chessboard, Zbigniew Brzezinski, the godfather of American policies and actions in Afghanistan and Iraq, writes that for America to dominate the world, it cannot sustain a genuine, popular democracy because "the pursuit of power is not a goal that commands popular passion... Democracy is inimical to imperial mobilization". He describes how he secretly persuaded President Carter in 1976 to bankroll and arm the jihadis in Pakistan and Afghanistan as a means of ensuring America's Cold War dominance. When I asked him in Washington, two years ago, if he regretted that the consequences were al-Qaeda and the attacks of 11 September, he became very angry and did not reply; and a crack in The Facade closed. It is time those of us paid to keep the record straight tore it down completely.

Finally, here's a peak oil denier conspiracy theory which is probably the best I've seen so far (I generally not prefer to give oxygen to this sort of thing though). Once again, it rests on the very soggy foundation of "abiotic oil" theory, and also includes the more plausible idea that peak oil is a conspiracy orchestrated by the oil companies. A lot of the points it argues are rather weak (even if we ignore the abiotic oil craziness), especially the idea that peak oil theorists support waging energy wars on the premise that "we need the oil" (I don't think I've seen a single peak oil site say this). In any case, even in the unlikely event these guys are right and peak oil is an oil company driven conspiracy (with us peak oil bloggers being unwitting dupes), I still think the same course of action is warranted - remove our dependency on fossil fuels (or "abiotic" fuels, for believers in this conspiracy). That'll teach the oil companies - and help solve the global warming problem to boot. And if it turns out us peak people are right, then we'll all be happy anyway.