Its Good To Be Green  

Well - at last some politicians are finally starting to make noises about peak oil, with the Sydney Morning Herald reporting that the Greens today called for a Senate inquiry to determine how the problem should be handled.

The Greens have called for a senate inquiry into what they say is an inevitable collapse in oil supply.

Greens senator Christine Milne says an inquiry would be a first step towards addressing the challenges of an oil crisis. "It's clear to me on the day that the government is talking about global security and Australian security, that they should be talking about the intelligence failure to face up to the global oil crisis," she told reporters. "What we do know is that the day of cheap, plentiful oil are over and that what we can expect is a lesser supply and a higher price into the future. Nobody knows when peak oil will occur but we do know that is going to occur in the next couple of decades and there's likely to be a steep decline. Australia must look at its security in terms of its transport options for the future."

Senator Milne said Australia needed to be future proofing itself and moving strategically to deal with the oil crisis, not just talking short-term about interim measures to reduce fuel prices. "This requires strategic thinking and that's why the Greens are moving for this issue of Australian oil production, Australian oil supplies, our transport infrastructure, to go off to a Senate committee to report next year on looking at long-term strategic options for Australia."

She suggested initial moves would be to remove the GST on public transport and major investment in public transport infrastructure. She also called for tax advantages for urban-based four-wheel drive vehicles should be removed.

Of course, if we take Mike Ruppert's address to the PetroCollapse conference in New York seriously its far too late for this (I'll assume for now his prediction of a massive economic crash "within weeks" is wrong, but who knows, maybe this latest prediction of imminent collapse will come true).

To be fair to the Liberals (and I might just note once again that I don't have any political axe to grind here - if there was a left wing government in power locally or in the US - stop giggling - I'd be just as critical of inaction on peak oil and global warming as I am with the present incumbents), one of the guys at Sydney peak oil got a reasonable response from Ian McFarlane when he wrote to him on the subject of peak oil. While I wouldn't say they are doing anywhere near enough, particularly in terms of encouraging renewable energy, at least they appear to have put some thought into the matter.

In its 2004 statement, 'Securing Australia's Energy Future', the Australian Government undertook a comprehensive review of its energy policies and approaches, and developed a long term framework to secure Australia's energy future. Key initiatives articulated in this report include those directed at diversifying and expanding Australia's energy interests. For example, energy diversity is pursued through the continued promotion of the renewable energy industry. The report details programs aimed at encouraging solar technology (e.g. $75m for the solar cities trial) and other programs that will benefit the renewable industry, such as the $500m low emissions technology fund.

On 8 June I formally launched the 'Renewable Energy Development Initiative', which will provide matching competitive grants worth between $50,000 and $5 million to Australian businesses for the development of renewable energy projects. These programs are complemented by the continuation of the Mandatroy Renewable Energy Target to 2030, which will provide over $2 billion in incentives for renewable energy investment.

The Australian Government is also focused on improving energy efficiency as a means of reducing Australia's overall energy needs. Key initiatives in this area include the delivery of improved market signals through energy market reforms, and the setting of minimum energy efficiency performance requirements for widely used appliances and for residential and commercial buildings.

'Securing Australia's Energy Future' also outlines a range of international energy initiatives. In particular, it notes that Australia is an active member of the International Energy Agency (IEA) and the Asia - Pacific Economic Cooperation (APEC) group, and that Australia seeks to use its membership of these organisations to improve its energy security position. For example, as a member of the IEA Australia maintains a 90 day stock of its (net) oil consumption to assist with any major oil shortages or disruptions. In the APEC context, Australia cooperates with regional partners to establish short and long-term strategies to improve energy security, such as through the provision of improved oil data.

Domestically, the Australian Government is seeking to improve the development of its own petroleum reserves through a range of measures, including acerage release and tax benefits designed to encourage additional exploration. These initiatives will assist Australia in meeting its future fossil fuel needs.

In relation to interstate transportation, the Australian Government supports the development of a competitive rail freight industry as part of an efficient and customer focused transport sector. A strong rail industry will increasingly complement road freight in coming years, especially given the expected doubling of the domestic freight task over the next two decades.

Accordingly, the Australian Government has committed in excess of $2 billion in rail projects on the AusLink National Network over the next five years. This AusLink funding will encourage the increased use of rail to move freight on the the national transport network.

Already the transport sector has moved ahead on the east-west corridor where more than 80% of freight is moved by rail. The Australian Government expects that improved rail infrastructure, especially on the key north-south route on the east coast, will increase rail competitiveness with road transport in this market.

Reports of hurricane damage in the gulf of mexico are showing around 110 platforms destroyed.

Hurricanes Katrina and Rita destroyed 109 oil platforms and five drilling rigs in the Gulf of Mexico, but only a small portion of production will be lost for good, the US government said.

Rita accounted for most of the damage in a region that ordinarily produces nearly one-third of US crude oil imports, Interior Secretary Gale Norton said in presenting a preliminary assessment report.

Rita destroyed 63 platforms and one drilling rig when it tore through the region on September 24, she said. Katrina destroyed 46 platforms and four drilling rigs when it hit the Gulf at the end of August. Katrina also caused extensive damage to another 20 platforms and nine drilling rigs. Rita seriously damaged 30 platforms and 10 drilling rigs.

"The two hurricanes coming so close together really illustrate how much of our offshore production was affected," Norton told the CNBC network. "We had altogether, with both of the hurricanes, about 2,900 platforms that were in the path of the hurricanes," she said. "We have no official estimate of the dollar value of the damage and the amount that it will cost to repair those facilities, but it will clearly be in the billions of dollars."

Alaron is predicting the oil price will hit $75 in the coming quarter.

Yesterday's soaring ISM manufacturing number seems to suggest demand for natural gas will be high. Many manufacturers with contracts will be sent scurrying for supply and could lead to tightness in other products. This comes at a time when the US government is warning Americans that our heating bills will be 70% higher this year. Natural gas production must be brought back on line and problems with the Sabine pipeline and Henry Hub have to be resolved quickly or we might face a huge challenge to avoid shortages.

Yet despite the recent weakness in crude oil the outlook for the rest of this year is still quite bullish. The recent failure to finish a potential head and shoulders topping formation seems to suggest that oil will build a base for a potential run up to the $75.00 per barrel area. This would signal an average price for crude at $70.00 per barrel in the fourth quarter. The fundamentals also support this bullish view and not just because of oil production. Early signs are indicating that the US economy is strong enough to handle the blow from higher energy prices.

So why are prices falling ? My view is a recession (starting in the US and spreading elsewhere) is a distinct possiblity and oil prices won't hold up if demand drops fast enough. Nothing goes up forever - and that applies to oil prices as much as it does to oil production. The other explanation is releases from the SPR and north east heating oil reserves have traders taking profits for now waiting to see what happens next.

The Backslope is also pontificating on things financial in " Energy and Financial Instability".

This month's ASPO newsletter is out. Colin Campbell has adjusted the depletion model after doing some more work on deepwater production and is now forecasting a "all liquids" peak date of 2010. Which leaves the old school peak oil researchers at 2005 (Deffeyes), 2010 (Campbell) and 2015 (Laherrere).

On the subject of old school peak oil researchers, Ron Schuler has a post up on M King Hubbert.

While "Hubbert's peak" propelled Hubbert to visionary status, his earlier work in geophysics was also highly influential. In 1937, while teaching at Columbia, Hubbert employed a mathematical analysis to explain how the hardest of rocks forming the crust of the Earth could show signs of plastic flow under extreme geophysical pressures. By the 1950s, his work regarding the flow and entrapment of underground fluids caused the oil industry to rethink its basic exploration methods; and much later, Hubbert authored a compelling argument that overcrust faults, whose origins had long puzzled geologists, originated as a consequence of underground fluid pressures. Hubbert was also influential, at Stanford and at Berkeley (1973-6), in advocating that earth and environmental science programs place a greater emphasis on mathematics and physics. He passed away in 1989.

"Growth, growth, growth -- that's all we've known . . . World automobile production is doubling every 10 years; human population growth is like nothing that has happened in all of geologic history. The world will only tolerate so many doublings of anything -- whether it's power plants or grasshoppers." -- M. King Hubbert, 1975.

WorldChanging has a post on the EU's passing of legislation specifying "at least 20% of energy production must come from renewable sources by 2020, with 25% as a non-mandatory goal when coupled with efficiency improvements".

TreeHugger has a post on increases in fuel efficiency for diesel hybrid trucks.

Initial tests of diesel-hybrid utility trucks indicate that they may have a 40%-60% reduction in fuel. Apparently utility trucks get better fuel reduction than passenger cars because they have massive batteries on board. The tests were performed on prototype hybrid utility trucks being used in the WestStart’s Hybrid Truck Users Forum (HTUF) pilot program. The target requirement for the hybrids was a 50% reduction in fuel consumption.

TreeHugger also has a post on increasing use of public transport in the US.

The Energy Blog has a post on a natural gas fired power plant in New York that is converting to use renewables. Why ? Natural gas is becoming uneconomic.

WorldChanging has another post on H51N (part of a growing storm of bird flu news). Past peak has some additional comments.

So what has bird flu got to do with peak oil (other than being another meme that attracts the attention of apocaphiliacs) ? Quite a few people around the traps (even with Matt no longer blogging) still seem to be keeping a wary eye on the progress of this new flu strain, which I tend to put down to Jay Hanson's throwaway line that the ultimate solution in the "dieoff" scenario is for the "elites" to use a bioweapon to depopulate the planet (thereby making sure that "they" aren't part of this aforesaid dieoff). I haven't noticed any conspiracy theory sites out there brooding obsessively on this line of reasoning, but no doubt somewhere out in the vastnesses of the internet someone is developing just such a theory.

So - now you've been suitably warned that this is just idle apophenia rather than necessarily linked to my normal topics, I'll note that there have been reports of Bush wanting to use the military to quarantine flu affected areas in the US (which brings to mind a Monty Python skit of people walking around medieval streets yelling "bring out your dead", but this time with camouflage outfits and evil looking helmets on), and there are also reports of some mysterious illness afflicting Toronto.

To use the slogan for our brave new world "Be Afraid !"

I'm just kidding of course - don't be afraid, it does no good - unless you went out and bought the "peak oil portfolio" I put together last week of course, in which case be very afraid - its all gone pear shaped in a mere 3 trading days - I may well have picked the exact day that marked the top of the market. Think of me as a contrarian indicator...