Ocean Power Or Lunar Power  

Posted by Big Gav

WorldChanging has an article on ocean/tidal power up, which makes the bold claim that by 2050, ocean/tidal power will represent the largest source of centralized energy production worldwide.

We've posted a number of items about ocean power (aka tidal power or wave power). It's the dark horse renewable energy system -- not many people are aware of it, but the more one learns about its features, the more attractive it becomes. Less transient than wind or solar power and less of a visual trigger for NIMBY backlash than wind turbines, ocean/tidal is starting to get more attention. If I was a betting man, I'd wager that, by 2050, ocean/tidal power will represent the largest source of centralized energy production worldwide (solar will probably figure higher overall, with the broad use of solar-embedded building materials, paints and polymers).

Technology Review has a good overview article on ocean power, including links to some companies developing the technologies and some discussion of current projects. Few of the technological or environmental claims in the piece will come as much of a surprise to WorldChanging readers. What might be a bit more startling is the news that the US Department of Energy has discontinued funding for ocean power development. As of the present the UK appears to be pushing to become the world leader in ocean/tidal power.

Oh, and one last cool thing about ocean power. Tides are generated from the pull of the Earth's moon. Ocean power can, in all seriousness, also be called Lunar Power.

Clark Boyd also did a radio program last year (Windows Media) describing the race to harness wave energy.

The Tech Review article "Ocean Power Fights Current Thinking" notes "Ocean waves provide a predictable source of energy that is easily tapped, and will likely have minimal impact on the environment, but the U.S. government is not pursuing this renewable resource.".

Australia should be well positioned to try and harness tidal energy, but projects seem to be thin on the ground (or in the ocean). I've previously mentioned Atlantis Energy's Aquanator, but nothing seems to have come of that effort.

Western Australia’s tidal energy potential has been actively promoted in the past, with a project proposed near the town of Derby, which is situated at the head of two adjacent inlets off the King Sound. The inlets would be connected via an artificial channel. By damming each inlet, differences in water levels in each basin could be controlled which would enable flow via the connecting channel. Power take-off would be achieved from a bank of turbines housed in a structure built in this channel. The project’s promoters submitted this scheme to the state government, which compared the scheme with an alternative gas-fired power plant and decided in July 2000 not to proceed with the tidal project.

There has also been some talk about a possible project near Fraser Island, but at this point its hard to see any of the possible tidal energy projects here getting the go ahead, in spite of the huge tidal ranges in the north of the country (far away from where most of the population lives).

Back To The Post Oil Future  

Posted by Big Gav

Richard Heinberg has a new article out - nothing new here for those who've read "The Party's Over" or "Powerdown", but a good summary nevertheless.

The imminent demise of the global petroleum industry will necessarily entail a complete redesign of industrial societies.

Oil has been the cheapest and most convenient energy resource ever discovered by humans. During the past two centuries people in industrial nations accustomed themselves to a regime in which more fossil-fuel energy was available each year. The global population grew quickly to take advantage of this energy windfall. Industrial nations also came to rely on an economic system built on the assumption that growth is normal and necessary, and that it can go on for ever. When global oil production peaks, as it will in the next few years, that assumption will come crashing down.

Talk About Peak Oil  

Posted by Big Gav

If you're of the belief that civilised soceity will collapse at the onset of peak oil, then the northern rivers region probably isn't a bad place to ride out the storm (though riding your bike back up the hill from the beach would be a hard slog).

A local blogger, Ozzy Moron, has a good summary of recent peak oil news down under (all of which I've noted here previously, but its good to see another local writing on the subject).

Where Is Your Next Hit Coming From ?  

Posted by Big Gav



(via MonkeyGrinder).

Get Your War On  

Posted by Big Gav



News from Afghanistan.

The Hooverization of George W. Bush  

Posted by Big Gav

While I'm looking forward to George Bush getting his just deserts one day, its only going to happen once things get grim for all of us. James Kunstler has a new rant up about the end of the Bush era.

Herbert Hoover was vilified for doing nothing about the depression that followed the stock market crash. When we look back on the years of George W. Bush we will marvel at his failure to lead, especially his failure to inform the public that our habits of daily life would have to change, that we could not continue to burn twenty million barrels of oil a day, and spend money we hadn't earned; that we desperately had to reform our suburban land development habits, that the WalMarts and other predatory corporations had to be restrained in their systematic destruction of local economies, that our railroads needed to be rebuilt, that our borders needed to be defended, that our local small farmers needed to be supported, that our industries needed to be re-scaled and retained here, that corporate chiseling had to be policed, that finance had to be qualitatively different than a craps game in some casino.

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Uncontrolled Oil Dependence Is A Threat To National Security  

Posted by Big Gav

The WA Sustainable Transport Coalition has a good article on energy security and uncontrolled dependence on oil.

We all know that peak oil is going to cause serious problems - this article identifies some lessons we can learn from other countries (such as Japan and Sweden) who have actually spent a lot of time and effort since the 1970's reducing their dependence on oil.

The Japanese ruling bureaucracy realised in 1974 that national security is about enabling Japan to survive oil shortages; that oil conservation is just as important as having a military capacity and that oil dependence was a serious threat to their way of life. Japan's energy security policy has reduced oil dependence in the transport sector by creating the finest rail system in the world, for urban commuting and intercity transportation, which is sustainable because it is reliant mainly on hydro electric sources (Hook, W. 1994). Intermodal passenger transport is highly developed with 6 million bicycles being used to access rail stations; very efficient modal interchanges linking buses and trains and providing secure bicycle parking.

Japan has introduced legislation requiring the sale of new cars, after four years of use to other countries so that new energy efficient cars, particularly small petrol electric hybrids, will, in a few years, renew their car fleet and make it the most fuel efficient in the world. Petrol is A$1.75 per litre, a price high enough to encourage the sale of smaller cars. Electricity generation is heavily dependent on oil and is the reason for Japan planning to generate 40% of its electricity from nuclear power. This electricity can be also used for more high-speed trains and to power electric bicycles which are becoming popular in Japan (Parker 2004 A). Japan has almost zero population growth, has no indigenous oil resources and has been sensibly planning to survive since the 1970s when Japan's elite bureacracy MITI made important decisions. Since the middle 1990's energy security planning has no longer been as dominant in decision making, so Japan may have problems in adapting to coming oil shortages. Fortunately Japan current commitment to reducing Greenhouse gas emissions will act as de-facto oil conservation policy and under that plan the major highway along the length of Japan will have hydrogen refueling stations and in time most of the hydrogen will come from renewable resources.

Around 1980 the US developed a national plan for the more energy efficient use of oil and gas which was designed to buy time to develop more energy efficient uses of renewable energy resources. As a result of the unwarranted influence of the military/industrial complex, instead it made massive investments in long range ballistic missiles and a nuclear arsenal, which is now obsolete. Since 1990 a group of neo-conservative republicans has formulated a clandestine energy security policy based on invading other countries to access their oil resources. This policy option is not open to Australia or other nations. Indeed, the EU accepts that conserving oil resources and investing in the energy efficient use of oil and renewable energy is the only sensible option.

Current Australian practice must be close to world worst, unfortunately. The things we have in our favour are a relatively low population density (slowly being eroded by continuous increases in immigration driven by the business community's desire for more consumers) and a lot of potential sources of energy (but with few incentives in place to begin developing these, other than exporting raw fuel).

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The Legacy of George F. Kennan, 1904-2005  

Posted by Big Gav

I referred recently to Richard Manning's "The Oil We Eat", which contained a reference to a memo written by George Kennan, sometimes known as "the architect of the cold war". Manning wrote:

Energy cannot be created or canceled, but it can be concentrated. This is the larger and profoundly explanatory context of a national-security memo George Kennan wrote in 1948 as the head of a State Department planning committee, ostensibly about Asian policy but really about how the United States was to deal with its newfound role as the dominant force on Earth. “We have about 50 percent of the world’s wealth but only 6.3 percent of its population,” Kennan wrote. “In this situation, we cannot fail to be the object of envy and resentment. Our real task in the coming period is to devise a pattern of relationships which will permit us to maintain this position of disparity without positive detriment to our national security. To do so, we will have to dispense with all sentimentality and day-dreaming; and our attention will have to be concentrated everywhere on our immediate national objectives. We need not deceive ourselves that we can afford today the luxury of altruism and world-benefaction.”“The day is not far off,” Kennan concluded, “when we are going to have to deal in straight power concepts.”

Kennan recently passed away, having come to regret the strategies he put in place - Counterpunch has an obituary for an old school conservative.
Was Kennan's dyspeptic Weltanschauung appropriate? He made his mark in public life when America's position in the world was so far above that of other nations as to be unchallengeable. The rest of the world had nothing remotely like the Willow Run plant or Henry Kaiser's shipyards. America's moral prestige, from 1945 through the joyous mob scene of President Kennedy's Berlin speech, was like the Second Coming.

But he saw, as the censorious guardian of an older tradition, that the nascent empire was antithetical to the old republic. A conservative of a type rarely seen these days, he believed in stewardship of the earth, and believed the country was "exhausting and depleting the very sources of its own abundance."

As the United States stands at the brink of the Peak Oil phenomenon, that observation begins to sound like wisdom. The country is now Number One only in military spending, debt, and cultural frivolity. China and India each graduate three times the number of engineers Americans do. The United States now ranks 28 out of 40 countries in mathematical literacy. China sits atop $610 billion dollars of U.S. debt.

Most intellectuals are fated to molder away in cow state colleges, second hand book shops, and third rate think tanks. Like Adam Smith, Karl Marx, and a handful of other bona fide thinkers, George Kennan made an outsized imprint on the world. His tragedy was that he came to regret his handiwork.

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Peak Oil Day At The New York Times  

Posted by Big Gav

The Oil Drum notes that the NYT managed 3 articles on Peak Oil on Friday - Kenneth Deffeyes noting that drilling in the ANWR is pretty much pointless, an article touting "green coal" (gasified coal plants and geologic storage) and Oliver Sacks praising hybrid cars.

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Peak Oil - Debate Or Vendetta  

Posted by Big Gav

CounterPunch has an in depth article on the debate about whether peak oil is real or not (I guess there are still people who don't believe the supply of oil is finite out there). It revolves around a conference call arranged by JP Morgan almost a year ago, featuring a debate between neo-Hubbertian guru Colin Campbell and flat-earth economist and widely quoted cornucopian Michael Lynch.

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The Long Emergency  

Posted by Big Gav

James Howard Kunstler has a good article in Rolling Stone on peak oil. Nothing new here for anyone who has read Kunstler before - he's as bleak as ever, but its interesting seeing the topic going out to this sort of audience (who reads Rolling Stone these days anyway - I don't think I've even seen a copy for about 10 years).

Carl Jung, one of the fathers of psychology, famously remarked that "people cannot stand too much reality." What you're about to read may challenge your assumptions about the kind of world we live in, and especially the kind of world into which events are propelling us. We are in for a rough ride through uncharted territory.

It has been very hard for Americans -- lost in dark raptures of nonstop infotainment, recreational shopping and compulsive motoring -- to make sense of the gathering forces that will fundamentally alter the terms of everyday life in our technological society. Even after the terrorist attacks of 9/11, America is still sleepwalking into the future. I call this coming time the Long Emergency.

The term "global oil-production peak" means that a turning point will come when the world produces the most oil it will ever produce in a given year and, after that, yearly production will inexorably decline. It is usually represented graphically in a bell curve. The peak is the top of the curve, the halfway point of the world's all-time total endowment, meaning half the world's oil will be left. That seems like a lot of oil, and it is, but there's a big catch: It's the half that is much more difficult to extract, far more costly to get, of much poorer quality and located mostly in places where the people hate us. A substantial amount of it will never be extracted.

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Battle Groups Head For Persian Gulf  

Posted by Big Gav

Whenever I block out the right wing media noise for a while I start to imagine that it's possible that the US hasn't been hijacked by a gang of lunatic extremists - but then I'll find myself reading something like this. Sounds like it won't be long until the bombs start falling on Iran.

I wonder if anyone has a site showing the German newspaper headlines in the late 1930's - I can just imagine it - "Hitler losing patience with Poland".

George Bush is no fool. Nor does he have infinite patience. The president would clearly prefer to see freedom come to Iran and Lebanon by peaceful means. But, if all else fails, we have three nuclear-armed carrier battle groups in the region that are more than capable of resolving the problem.

The head of India's largest oil company notes that the oil price will go through the roof if the US does invade Iran next.

"You launch one more attack and you can't even guess where the speculation will go," Raha said. "With the stalemate in Afghanistan, stalemate in Iraq and elsewhere, you already have a price of $55 a barrel."

India, the third-biggest oil consumer among 45 nations in the Asia Pacific region, relies on Iran and other Middle East nations for more than half of its oil. Secretary of State Condoleezza Rice said March 16 the U.S. has ``concerns'' about India's plan to buy gas from Iran.

``I see no reason why India's priorities should be subservient to U.S. priorities,'' said Raha, who has worked for state-run oil companies for the past 35 years. ``The U.S. is chasing oil and gas as badly as China or India or anybody else.''


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The Energy Crunch to Come  

Posted by Big Gav

Having linked to Michael Klare's previous article for TomDispatch yesterday, its quite timely that they have published a new piece, again focusing on peak oil.

Mike Klare, author of an indispensable book on the role of oil (and arms) in our world, Blood and Oil: The Dangers and Consequences of America's Growing Petroleum Dependency, recently revisited the question of oil, the invasion of Iraq, and the Bush administration's desire to put in place a post-Saddam-Hussein regime "disposed to satisfy U.S. energy objectives," at the ZNET website. Below he explains the potential crisis that lies behind the American urge to put, as they say at the Pentagon, our "footprint" (and all those little prints from our military bases) down on the "arc of instability," which is basically a term for the major oil lands of our planet. When you read Klare on the potential oil crunch to come, you can understand all too well why the rush to secure oil supplies by hook or crook (or cruise missile) is only accelerating.


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Whale Oil  

Posted by Big Gav

Lawnorder has a pointer to a good article on Daily Kos about whale oil - the only commodity to have gone through a full Hubbert's peak depletion cycle (which could indicate that fears of Whale Oil depletion may be well founded after all).

The 'bell-shaped' production curve of a non-recyclable mineral resource was described first by M. King Hubbert in 1956, and was used to correctly predict that the production of crude oil in the United States (Lower-48) would peak in 1970. It is reasonable to suppose that the worldwide production of crude oil will also follow a similar bell-curve, with much of the present debate focusing on when the peak will occur. It is anticipated that it will generate an epochal change deriving from a steep rise in prices.

The rise in prices at the peak is expected because of the switch from a market driven by production to one driven by supply. The Hubbert model, however, does not itself provide quantitative information on prices, and it is not possile to draw conclusions from individual country peaks because oil prices are set globally.

In order to obtain historical evidence for price trends, one needs to examine a case where a non-recyclable resource went through a complete Hubbert cycle worldwide. There are no previous examples of a mineral resource that has done so. In fact, crude oil may turn out to be the first, which incidentally may be one of the reasons why the concept of 'peak oil' is so difficult for many people to grasp.

We can derive insight into crude oil price trends from [this] - Whale oil prices started to increase approximately at the inflection point of the curve well and before the production peak,. An upward spike in prices took place a few years after the peak, being also detectable in the non-inflation corrected price data.



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Will The End of Oil Mean The End of America ?  

Posted by Big Gav

321 Energy ponders the consequences of the US government continuing their current strategy for dealing with peak oil.

As with Pirsig’s monkey, the alternative consequences of each choice could not be more dramatic. Weaning ourselves off of cheap oil, while not easy, will help ensure the vitality of the American economy and the survival of its political system. Choosing the route of force will almost certainly destroy the economy and doom America’s short experiment in democracy.

To date, we have chosen the second alternative: to secure oil by force. The evidence of its consequences are all around us. They include the titanic US budget and trade deficits funding a gargantuan, globally-deployed military and the Patriot Act and its starkly anti-democratic rescissions of civil liberties. There is little time left to change this choice before its consequences become irreversible.

The world is quickly running out of oil. In the year 2000, global production stood at 76 Million Barrels per Day (MBD). By 2020, demand is forecast to reach 112 MBD, an increase of 47%. But additions to proven reserves have virtually stopped and it is clear that pumping at present rates is unsustainable. Estimates of the date of “peak global production” vary with some experts saying it already may have occurred as early as the year 2000. New Scientist magazine recently placed the year of peak production in 2004. Virtually all experts believe it will almost certainly occur before the end of this decade.

And the rate of depletion is accelerating. Imagine a production curve that rises slowly over 145 years—the time since oil was discovered in Pennsylvania in 1859. Over this time, the entire world shifted to oil as the foundation of industrial civilization. It invested over one hundreds trillion dollars in a physical infrastructure and an economic system run entirely on oil. But oil production is now at its peak and the right hand side of the curve is a virtual drop off. Known reserves are being drawn down at 4 times the rate of new discoveries.

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Abiotic Oil  

Posted by Big Gav

I keep seeing Abiotic Oil references popping up whenever Peak Oil is discussed - which is sometimes amusing (when the poster is obviously a crackpot) and sometimes annoying (when the poster pretends that this is the true situation and widely acknowledged by geologists).

Richard Heinberg has a good summary of the Abiotic Oil theory here. Mobjectivist has also posted on the topic recently.

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Betting On Commodities  

Posted by Big Gav

Canada's Globe and Mail reports on the boom in commodities (particularly energy commodities) (which wouldn't be all that obvious from today's stockmarket performance).

With the benchmark Commodities Research Bureau index zooming to a 24-year high, some are warning of a bubble that could soon burst. But others say the party is just getting started.

"I believe that investing in commodities will represent an enormous opportunity for the next decade or so," says Jim Rogers, a U.S. fund manager and author of the book Hot Commodities.

For investors who think they've missed the train, there's reason to believe the ride may be far from over. Mr. Rogers, co-founder of the Quantum Fund with George Soros, points out that the last big commodities cycle lasted a full 14 years, from 1968 to 1982.

No commodity is drawing more attention than crude, which set jaws dropping again this week as it briefly pushed through $57 a barrel. But even as oil hits new highs, investors such as Mr. Sprott are betting on where the big money will go next.

While he remains a huge fan of oil, he's also gambling on coal and uranium, which have already risen sharply in price and could go higher as the world exhausts its finite supply of crude. Plenty of investors appear to share that view.

Reinforcing this view are recent comments by the head of the IAEA. His comment that nuclear power (from mining to waste "disposal", whatever that means) has about the same carbon emmissions as wind or solar power is interesting - I'd like to see a calculation of the total EROEI for nuclear power - some peak oil people claim it's low, but I've never been very convinced by the reasoning used.
Expectations of a sharp rise in energy demand and the risk of climate change are pushing many countries to return to the idea of nuclear power, the head of the United Nations nuclear watchdog said on Monday.

Even the most conservative estimates predict at least a doubling of energy usage by mid-century, Mohamed ElBaradei, director general of the International Atomic Energy Agency (IAEA), told a conference on nuclear energy in the 21st century.

"All indicators show that an increased level of emphasis on subjects such as fast growing energy demands, security of energy supply, and the risk of climate change are driving a reconsideration, in some quarters, of the need for greater investment in nuclear power," ElBaradei said.

"The IAEA's low projection, based on the most conservative assumptions, predicts 427 gigawatts of global nuclear energy capacity in 2020, the equivalent of 127 more 1,000 megawatt nuclear plants than previous projections," he said.

ElBaradei pointed to nuclear energy policy plans in China, Finland, the United States and possibly Poland as proof that nuclear power may be returning to vogue.

"Nuclear power emits virtually no greenhouse gases. The complete nuclear power chain, from uranium mining to waste disposal, and including reactor and facility construction, emits only 2-6 grams of carbon per kilowatt hour," he said.

"This is about the same as wind and solar power and one to two orders below coal, oil and even natural gas."

As a result we're seeing a mania for uranium stocks on the ASX. This started with the bigger producers (ERA, WMR and RIO) and has now spread to the very speculative end of the market (PDN, RFT and DYL).

Energy Bulletin also has a good article today on the current debate about when the peak will occur.

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Oil Wars  

Posted by Big Gav

Here's an interesting article from last year on the US military strategy to control the world's oil supplies.

In the first U.S. combat operation of the war in Iraq, Navy commandos stormed an offshore oil-loading platform. "Swooping silently out of the Persian Gulf night," an overexcited reporter for the New York Times wrote on March 22, "Navy Seals seized two Iraqi oil terminals in bold raids that ended early this morning, overwhelming lightly-armed Iraqi guards and claiming a bloodless victory in the battle for Iraq's vast oil empire."

A year and a half later, American soldiers are still struggling to maintain control over these vital petroleum facilities -- and the fighting is no longer bloodless. On April 24, two American sailors and a coastguardsman were killed when a boat they sought to intercept, presumably carrying suicide bombers, exploded near the Khor al-Amaya loading platform. Other Americans have come under fire while protecting some of the many installations in Iraq's "oil empire."

Indeed, Iraq has developed into a two-front war: the battles for control over Iraq's cities and the constant struggle to protect its far-flung petroleum infrastructure against sabotage and attack. The first contest has been widely reported in the American press; the second has received far less attention. Yet the fate of Iraq's oil infrastructure could prove no less significant than that of its embattled cities. A failure to prevail in this contest would eliminate the economic basis upon which a stable Iraqi government could someday emerge. "In the grand scheme of things," a senior officer told the New York Times, "there may be no other place where our armed forces are deployed that has a greater strategic importance." In recognition of this, significant numbers of U.S. soldiers have been assigned to oil-security functions.

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View from the Peak  

Posted by Big Gav

WorldChanging has another post on Peak Energy, citing the Herold report on oil major peak production dates and listing some key peak oil resources.

Including, to my surprise, this one !

Treehugger wrote an excellent introduction to the complexities of the peak oil concept. Energy Bulletin, the Association for the Study of Peak Oil & Gas, and the Peak Energy Blog are good daily resources for energy and oil industry news, with a focus on the question of peak production. The current flurry of attention will undoubtedly fade, but this is an issue definitely worth keeping an eye on.

Do any of you have favorite oil and energy information websites?

I'm not so sure I agree that the current flurry of attention will fade - as long as oil prices keep climbing people are going to be talking about oil. And the only way I see them falling back below $50 a barrel is the onset of an economic slowdown in China and/or the US.

Green Power Running Out Of Puff  

Posted by Big Gav

It appears some of my earlier predictions were on the mark - The Age is reporting that RECS prices are falling and as a result planned renewable energy projects may not go ahead.

Its hard to be surprised at the government's complete lack of vision on this topic, but its still annoying.

The renewable energy industry has suffered a severe setback with a collapse in prices putting many proposed wind farms in jeopardy.

Industry proponents blame Federal Government policies and the damaging actions of big hydroelectric companies for threatening as much as $6 billion of investment. They say many proposed projects may now not proceed. Since last year's federal election, the price of renewable energy certificates, known as RECs, has slumped from about $40 a megawatt hour of electricity generated to about $36 because the Howard Government's decision not to increase the renewable energy quota is starving the market of growth potential.

In addition it looks like federal government funding for solar power is also disappearing.
As oil prices hit a record high, the Federal Government is considering walking away from the only scheme that gives consumers a rebate when they purchase rooftop solar power systems.

The photovoltaic rebate program, managed by the Australian Greenhouse Office, gives householders and community groups thousands of dollars back on systems that convert sunlight into electricity as a measure to reduce greenhouse gas emissions.

The scheme has been extraordinarily popular and has more than doubled the number of solar panels on roofs

Stupid dinosaurs.

Secret US plans for Iraq's oil  

Posted by Big Gav

Greg Palast (who also exposed the Florida vote fraud in the 2000 US presidential election) has produced a film for the BBC about US plans for the Iraqi oil industry, which were made before the 9/11 destruction of the world trade centre.

If the people interviewed are to be believed, you'd have to say that the neo-con camp have no idea about peak oil (or don't think it is valid).

The industry-favoured plan was pushed aside by a secret plan, drafted just before the invasion in 2003, which called for the sell-off of all of Iraq's oil fields. The new plan was crafted by neo-conservatives intent on using Iraq's oil to destroy the Opec cartel through massive increases in production above Opec quotas.

Philip Carroll, the former CEO of Shell Oil USA who took control of Iraq's oil production for the US Government a month after the invasion, stalled the sell-off scheme.

Mr Carroll told us he made it clear to Paul Bremer, the US occupation chief who arrived in Iraq in May 2003, that: "There was to be no privatisation of Iraqi oil resources or facilities while I was involved."

Ariel Cohen, of the neo-conservative Heritage Foundation, told Newsnight that an opportunity had been missed to privatise Iraq's oil fields.

He advocated the plan as a means to help the US defeat Opec, and said America should have gone ahead with what he called a "no-brainer" decision.

Mr Carroll hit back, telling Newsnight, "I would agree with that statement. To privatize would be a no-brainer. It would only be thought about by someone with no brain."

Ms Jaffe says US oil companies are not warm to any plan that would undermine Opec and the current high oil price: "I'm not sure that if I'm the chair of an American company, and you put me on a lie detector test, I would say high oil prices are bad for me or my company."

The former Shell oil boss agrees. In Houston, he told Newsnight: "Many neo conservatives are people who have certain ideological beliefs about markets, about democracy, about this, that and the other. International oil companies, without exception, are very pragmatic commercial organizations. They don't have a theology."


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Beltway Waking Up To Peak Oil ?  

Posted by Big Gav

Al Jazeerah has a good article on signs that some people might be working out that Plan A isn't going to work. Of course, this is unlikely to mean they'll decide to spend the $100 billion odd a year they spend occupying Iraq on something a bit more useful.

While in Europe trying to appear conciliatory while remaining malevolent disfunctional Daddy, President Bush announced a plan to help China and India access US technology to be able to develop their coal fired power plants much more efficiently. Somebody in the Bush Admin actually understands that American prosperity and security is at risk to Asian economic expansion producing so much CO2, so much greenhouse gas, that Americans will be effected by subsequent global warming.

Not yet recognition of how close we all are to a cliff; not yet recognition that we are already skidding off the road, but recognition of the cause and effect of global-scale problems and the need to at least tinker with Plan A and get proactive if - and we'll get Beltway parochial again - the present economy is to keep expanding.

Not yet even close to recognition that exercising your dominion on this small blue planet might entail using America's technical prowess to help other competitive emerging economies get past coal, past now peaking oil to a post-fossil fuel, clean energy economy so that we all survive and not just as peasants or hunters and gatherers.


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Oil Mania ?  

Posted by Big Gav

The local investment community is starting to wake up to Peak Oil (the ones who haven't already piled into energy stocks that is) - maybe the price breaking the $57 mark gave them a clue.

Unsurprisingly, given the publicity campaign we've seen about uranium and nuclear energy, Australia is now negotiating with China to start uranium sales. This has done wonders for the ERA and BHP share prices this morning, but Paladin went nowhere (presumably because their mine is offshore). Apparently our repulsive foreign minister has been heard to gloat lately that Australia will be the Saudi Arabia of the new nuclear age. If thats so why has he been so gleeful about depriving the East Timorese of their fair share of Timor sea oil and gas - does he just like being evil for the sake of it, or is he aware of peak oil (and gas) ?

Henry Thornton also has some comments about uranium and China's expanding nuclear industry.

The other matter not fully being considered by many investors are implications of Kyoto. For a company with over 30% of known uranium reserves the Kyoto Protocol was an important event.

As of March 7th, 2005, 70 countries have ratified the Kyoto Protocol. This list includes Austria, Belgium, Brazil, Canada, Chile, Finland, Germany, Greece, Israel, Italy, Malaysia, Mexico, Netherlands, Norway, Philippines, Russia, South Korea, Spain, Sweden, Switzerland, Thailand, Ukraine, United Kingdom, Uzbekistan and Vietnam. Just think, none of these countries will probably ever build another copper or lead smelter and that’s just for starters.

China has approved Kyoto but is a long way from ratification. If China did move up the scale to ratification it would need to massively increase the nuclear program. In any event many of the countries seem unable to adhere to Kyoto without recourse to nuclear power programs. Strong demand growth for uranium is assured and even the green movement will need embrace nuclear power if their emission targets are going to be met. The only noticeable countries that have not ratified Kyoto are Australia and the USA. BHPB clearly thought about these and other issues. The fact that WMR's Olympic Dam hosts over one third of known uranium reserves made WMR an attractive asset. There are always risks and one of these relates to new discoveries. For instance, there are occurrences of uranium in Brazil but the extent and grade of mineralisation is yet to be determined.


The same article had this warning (after some tedious explanation of raw material inventories and processing capacity):

The current state of play for the US is for an economy well past peak acceleration with raw material industries operating at or close to capacity. Demand relative to supply is falling and this is causing inventories to rise. The internal supply of raw materials cannot and will not meet demand without a massive fall in the standard of living. Competition for available supply of raw materials between the US, China, India and other emerging economies will rise resulting in international tension.

And lastly this note on inflation (something a lot of commentators seem to be ignoring - it appears modern economists only worry about wage inflation, not inflation in goods, services and assets):

Last a word on commodity prices. Price hikes of 71½% for iron ore have been headline news along with bigger rises for coking coal. What about other metals, excluding LME base metals? From the start of 2004 and up until about a week ago, the geometric mean rise for 16 other metals was 62.7%. The metals in this list are antimony, bismuth, cadmium, cobalt, columbium, ferro-chrome, ferro-manganese, germanium, indium, molybdenum, rhenium, ruthium, stainless 304, tantalite, tungsten and vanadium. Vanadium pentoxide recorded the biggest price hike of 275% and rhenium metal fared worst with a fall of 7%. The geometric mean for annual increases in the prices of iron ore and coking coal is 85.9%. As a group LME base metals performed poorly recording a geometric mean of 26%, ranging between -3% for nickel and +43% for copper. Huge annual gains in metal prices and oil holding well above US$50/b is surely indicative of a boom and there is probably only two or maybe three of these in a lifetime. These price hikes will eventually get reflected in the price of goods. With inflation will come higher interest rates.

This graph is an interesting comparison of commodity prices in real versus nominal terms - you can see the previous oil price shocks quite clearly - but the recent oil price rise has barely had any impact at all when viewed from a historical perspective.



I guess there are a number of ways you could look at the future:

1. We're in a commodities "super cycle" and then real cost of commodities is due for a structural increase as India and China industrialise and availability of commodities is constrained due to capacity limitations and resource depletion.

2. The commodities boom will bust as the impact of higher (and continuously rising) energy prices kills off global economic growth.

3. Resource constraints evaporate as more supply is bought online and real commodities prices resume their long term downward trend.

From a peak energy point of view option 2 is the most likely - though I'm kind of hoping we get option 1 - at least for a few years (in the meantime working on energy efficiency and cleaner energy sources). Option 3 is probably what most economists believe will happen.

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Head For The Hills Time Already ?  

Posted by Big Gav

Matt Savinar of Life After The Oil Crash" had this to say (on ROE3) after he was quoted in the US House of representatives yesterday:

If you had told me two years ago (prior to me learning about peak oil) that I would be getting quoted on the floor of congress by a republican congressman, I would have almost assuredly said to you, "Oh my - is there like a meteor heading towards the earth or something?"

Suffice it to say I was as shocked as much (if not more so) than all of you.

And I'm not sure if this is a good thing or not. Ever since first learning about peak oil, I have thought that once the politicians start talking about it - you know things are about to unravel.

Most of us are hoping we have another 5 years of bumpiness before things "get really bad." We may not have 5 months. Or even 5 weeks at this point.

I just got back from hearing Ruppert speak. And to be perfectly honest, I was on the verge of crying.

It's really, really bad folks. I'm wrapping up all the paperwork and accounting and stuff I need to do, going to try to get rid of the 1,000 books I have on stock, and then I'm heading for the hills, although I'm not sure exactly where yet. I would head this very moment if I could.

I did not think things would get this bad, this fast. But what is one to do?


Has anyone seen the text of Ruppert's latest talk ? I remember reading one of his messages last year where he said it was time to head for the hills (which was followed shortly later by something saying nothing to worry about, peak won't hit until the end of 2007) - the main problem with Mike and FTW is the mix of paranoia, conspiracy theories and frequent changes of advice and focus (it doesn't seem that long ago that he was off to the White House to accuse Dick Cheney of masterminding the destruction of the world trade centre - not that that's entirely out of the question, but - unsurpisingly - nothing seemed to come of this particular crusade) - its not easy to get much clarity from there, even if he does thread together a lot of interesting information.

In general the more extreme parts of the peak oil world seem to be freaking out today - and the oil traders seem to be following suit, with no one believing OPEC's pledge to boost production quotas is going to make the slightest bit of difference.

In the meantime, the poor old ANWR has been opened for drilling, as I predicted it would be a little while back. Not that it really makes any difference - at this stage its well past time to start getting rapidly more efficient with energy usage and finding substitues for oil wherever possible. Drilling like crazy just makes the top of the curve a bit wider and makes the drop off steeper later on.

(DarkSyd at UTI also has a good rant about Never getting Into Debt).

Lastly, for those who haven't seen it, here's the full transcript of the speech in the US House of Representatives.



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Peak Oil Popping Up Everywhere  

Posted by Big Gav

I suspect its going to be hard to track the flow of Peak Oil news in the coming months - even Energy Bulletin seems to be missing a lot lately.

Today seems to be the busiest yet, with TreeHugger publishing a good introductory article called "The Ascent of Peak Oil".

I have been hoping PO was kind of a crank hobby which would take a decade to eventuate rather than an actual imminent disaster waiting to happen, but what was a trickle of speculation is now a full on flood.

These guys have done what I would have liked to have the capacity to do - analyse individual energy companies and try to work out their individual peak production dates. The results aren't pretty.

Herold believes that the French oil company, Total S.A., will reach its peak production in 2007. Herold expects 2008 to be critical, with Exxon Mobil Corp., ConocoPhillips Co., BP, Royal Dutch/Shell Group, and the Italian producer, Eni S.p.A., all hitting their peaks. In 2009, Herold expects ChevronTexaco Corp. to peak. In Herold's view, each of the world's seven largest publicly traded oil companies will begin seeing production declines within the next 48 months or so.

Executive vice president Richard Gordon, who heads Herold's global strategies team, says the firm's goal in doing peak-production estimates for individual oil companies is simple: "If the dinosaurs are going extinct, we are trying to figure out which ones are going to go extinct the soonest."

Rigzone asks " How Will the 'Peak Oil' Scenario Affect Our Global Economy?", but doesn't even try to answer the question.

Mobjectivist also has a bunch of news, including a Republican congressman addressing the US House of Representatives on the topic of peak oil.

Marshall Auerbach also has a new article called "The View From Hubbert's Peak" (which even references FTW, which must be a first for an economics journal).
Algeria’s minister for energy and mines has conceded what many in the “Peak Oil” camp have been arguing for quite some time: OPEC has reached its production limit, and trying to stretch output by one million barrels per day isn't likely to lower oil prices.

Current market conditions have led to the most remarkable Damascene conversion of all: The rapid rise in global oil demand should lead the industrialised world to promote energy conservation and alternatives to oil, the International Energy Agency (IEA) warned last week. The cri de Coeur from the West’s leading energy-policy advisor marks a sharp turnaround from an organization which has hitherto dismissed notions of an imminent supply shortages and consistently overstated energy supply. Indeed, as recently as last year, the IEA was openly expressing the hope that demand growth might slow in 2005, when actual figures already proved this wish utterly fanciful. China's oil demand alone is expected to grow by 33% this year. Industrialized and developing nations are expanding their economies as fast as possible to generate cash and liquidity as a means of securing more oil.

In response to the most recent surge in oil prices, President Bush has called for increased energy conservation (interestingly enough, a stance that was disparaged by his Vice President just 2 years earlier when he was eagerly pressing the case for war in Iraq), as well as using America’s increasing reliance on imported oil (from increasingly unstable regimes) as justification for increased drilling in the Arctic National Wildlife Refuge, on Alaska’s North Slope.

The problem, as energy investment banker Matthew Simmons - long a smoke alarm for Peak Oil - has said repeatedly, "is that the world has no Plan B." Simmons is absolutely correct. He further notes, “The world's network of crude oil pipelines also is now operating at virtually 100% capacity. For almost all of 2004, the world's tanker system operated at full capacity too. This sparked an unprecedented rise in taker rates, which added up to $5 to $6 per barrel to the wellhead price of oil in some key long-haul export routes.” Why are no more tankers being built? Because, as Simmons, Campbell, Groppe, Michael Ruppert and others in the “Peak Oil” camp have argued, soon there won't be enough oil to ship to cover what it would cost to build them.

In other news, Russia is likely to build a new gas pipeline directly from St Petersburgh to Germany (and possibly onwards to Britain), bypassing Belarus and the Ukraine - no doubt prompted by the Ukraine's election of a pro-American president rather than a pro-Russian one. Eurasia seems to be reforming once again (albeit with a lot of holes in the middle).

And finally, Monkeygrinder notes there is a lot of methane about, and that it doesn't smell all that good. Personally I'm a bit conflicted about this - both from an economic viewpoint (I like investing in natural gas producers, and they bring a lot of money into the country) and a global warming viewpoint (its better than burning coal, and could be the feedstock for the first steps towards a hydrogen economy). Admittedly if an LNG ship or unloading facility were to blow, it would be best if this happened well away from a populated area.

While I have an enormous amount of contempt for the "War On Terror" (or Tyranny, or whatever else it is this week) and mostly consider it a giant scam intended to keep us in a state of fear, the risk of attacks isn't zero, and is probably rising the longer US (and other) forces remain in the middle east. Given that, I'd consider the biggest target in Australia to be the North West Shelf LNG plant - which would make a much bigger bang than just one ship or unloading terminal. So while security guards walking around the harbour bridge is just stupid security theatre, I'd hope there are a few real security people guarding that one facility.

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Onward to Iran in The Herald  

Posted by Big Gav

Richard Heinberg's "Onward to Iran" article has made an appearance in the Herald's Webdiary, sparking the usual debate (those that pass for right wingers these days in complete denial, everyone else agreeing with the analysis).

I've been meaning to write my own review of The Party's Over for a while, but hadn't quite managed to get there. It was the first book I read that focussed purely on Peak Oil and is probably the most influential in the peak oil "community" - it was even recommended to all members of the Queensland Parliament last week.

The book covers quite a lot of ground - starting with the fundamentals of how energy is stored and transformed, then moving on to a history of energy usage as human societies have advanced through to the present day (with quite a lot of focus on how the struggle to control oil reserves was a major thrust behind both world wars, along with all the troubles in the middle east ever since).

The book then addresses the theory of Hubbert's Peak, and examines all the possible alternative sources of energy in a oil depleted world. The conclusions it reaches are all particularly bleak - thre simply isn't enough cheap, available energy for modern industrialised societies to continue in their present form.

Heinberg believes collapse of industrial societies is inevitable after the peak is reached - and that the only way to adapt is to "powerdown" - to localise economies and alter the way we live.

FTD also has a link to another review of "The Party's Over" today, along with a biography of Richard Heinberg, written by my neighbourhood's other peak oil obsessive, Ian McPherson (who wrote quite a lot of the comments on the latest WebDiary piece).



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At The Peak  

Posted by Big Gav

Axis of Logic has an article claiming we are bumping along the top of Hubbert's Peak, which seems pretty reasonable given the confused mutterings from OPEC lately.

However, there is a simple explanation for the steady rise of oil prices and the curious obfuscations of OPEC spokesmen. We are nearing the phenomenon of global Peak Oil. We’re probably not there yet, just bumping along near the top of the Hubbert Curve. OPEC has only a limited capacity to pump any more oil. ”One does not have to be a convert to the “Peak Oil” concept to be aware that outside the FSU [Former Soviet Union] oil production appears to be very near peaking, with output from new discoveries just barely offsetting depletion in mature producing conventional oilfields.”

If we have hit the structural production peak of oil worldwide, then the trajectory of prices will be relentlessly upward, with only temporary respites. The spokesmen will blather on about ‘terrorism’ or ‘refinery fires’, but the prices will tell the real story. If the increasing prices start a recession that reduces demand, there will be another temporary ‘respite’ as production continues a relentless decline after we have gone over the peak.

“Oil prices will rise through 2008 and stay high thereafter as demand increases and concern mounts that global production is nearing its peak,” according to analysts at Lehman Brothers Holdings Inc.

When Lehman Brothers admits oil is peaking on Bloomberg, its time to fasten your seatbelts. The ride is going to be rocky.


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Hubbert's Peak Revisited  

Posted by Big Gav

321 Energy has an editorial called Hubbert's Peak Revisited that examines the entrails of the energy market looking for signs of Hubbert's Peak (via How To Save The World).

Few have taken “Hubbert’s Peak” seriously even though it has dire and far-reaching implications, both economic and geopolitical. But with the price of oil continually hitting new highs, surpassing $44 per barrel in the last week, it is rapidly becoming apparent that an energy crisis may be in the making. This is also evident in the escalating prices of other energy commodities. Though the price of oil is up 36% so far this year (and making all the news), the price of coal is up 55% and uranium 28% (64% in the last 12 months). In fact, since global monetary easing began, the price of coal has doubled and the price of uranium has soared by 150%. Energy is on fire – and is one of the few sectors that we are adamant about investing in at this time, especially given the recent and troubling broader stock market weakness.

Elsewhere, following BHP's (presumably successful) acquisition of WMC, the Herald asks "How safe is nuclear? BHP needs to decide". The question here is are they willing to admit that they bought WMC for its uranium reserves, and how they sell nuclear fuel as "solution" to global warming while still protecting their coal business.

Meanwhile ex-BHP CEO Paul Anderson has suggested that the GST be scrapped and replaced with a carbon tax - sounds good to me.

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The Road From Green Revolution to Fatal Harvest  

Posted by Big Gav

One of the other writings that first got me into the whole peak oil thing was an essay called The Oil We Eat - Following the food chain back to Iraq by Richard Manning, which discusses how dependent modern industrial agriculture (based on the so called "green revolution") is on oil.

WorldChanging has some good posts on the global food system which discuss a lot of the same issues.

There are so many criticisms around the current global food system that for a while I started wondering if in fact it had already collapsed and I was studying a post-apocalyptic food system.

The difficulty with data around the food system is a little like data around climate change, only much more fragmented and fast-moving. If a group of scientists make a claim, it's fairly easy to find a Bjorn Lomborg-type claiming it ain't so, you're just fear-mongering. Discerning the truth of what's going on with the global food system at the numbers and science level requires a lot of time and energy. There is contradictory information and all of it cannot be right. At the end of the day it boils down to epistemology and axiomatic truths, and a choice needs to be made as to what we are willing to accept as legitimate data.

In trying to discern patterns in the mass of data it seemed to me that there are two broad schools of dueling, wheeling thought, with a host of lesser and emerging schools emanating from them. The first is the modern Green Revolution. The second, simultaneously representing an older form of agrarian logic and a response to the Green Revolution, can be dubbed (perhaps unfairly) the Fatal Harvest School.

US DOE Report Attracting Widespread Attention  

Posted by Big Gav

Most Peak Oil blogs picked up this report over the past week - now WorldChanging (who have been giving the topic regular exposure) has a link to the Al Jazeera report, via Mr Viridian Bruce Sterling.

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Wind Power in Australia  

Posted by Big Gav

WorldChanging has reported that the Global Wind Energy Council released figures showing that wind power added 7,976 megawatts to global power production in 2004, bringing the total to 47,317 megawatts - just over 47 gigawatts of wind power, worldwide. Germany ranks first in national wind capacity, at 16.6 GW, Spain second at 8.3 GW, and the US third at 6.7 GW. 72 percent of new wind installations in 2004 were in Europe, 16 percent in Asia, and only 6 percent in North America.

The Australian Wind Energy Association has compiled a list of proposed Wind Energy Projects in Australia.

While the installed base is currently quite small (mostly Pacific Hydro wind farms in Victoria), capacity almost doubled in the past 12 months and there are a much larger number of projects under construction or at the feasibility study stage.

Summary (all figures MW/h)
Currently Operating380
Under Construction355
Under Tender363
Planning Approved926
Feasibility4202
Total6225


The regional split actually makes sense, with 2254 Mw for windy, energy deficient SA and 1634 Mw for Victoria. Tasmania may well be exporting all their new wind power (565 Mw) through their new interconnector to the NEM.

The one surprise is that WA only has 264 Mw planned - given that its probably the windiest place on the planet and there are already problems with gas supplies and blackouts (which will no doubt be worsened when the new desalination plant comes online), I would have thought they'd be covering some of that arid coastline with windfarms.

If we look at this in terms of RECS, and make an assumption that we consistently get 20% of this wind generation capacity over time, this is about 1200 MW/h of green energy - which is more than the entire MRET target for 2010 (without even considering all the other renewable energy generators).

Assuming my calculations are correct, the government really needs to be looking at at least doubling the MRET target just to ensure that all this new renewable energy capacity is financially sound (even if we ignore all the other reasons why this must be done).

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ALP Seminar - The End of Oil  

Posted by Big Gav

The Labor party seems to be making a bit of noise about Peak Oil lately - Carmen Lawrence is organising a seminar in Fremantle next month.

Though the Greens were probably the first party to talk about Peak Oil here, they seem to have gone silent on the issue (or they simply aren't getting any newspaper coverage). Then again, maybe they are busy defending themselves against unjust lawsuits.

The Adelaide Review also has an article called "As The Well Runs Dry" that does a fairly standard introduction to Peak Oil.

If we are fortunate enough to receive the leadership we will need from our government, what form of society can we move towards that will be sustainable in a world without cheap and plentiful oil? Sustainability will only be possible if a number of conditions are met. Food production must become much more local in nature and must use techniques that do not require large inputs of chemical fertilizers. A great number of the people who lose their jobs in the coming oil crisis will find employment as human labour resumes its traditional place in agriculture.

The end of cheap, rapid, oil-fuelled transport will mean the end of globalisation. Thus, we will need to recreate our manufacturing industries to provide basic needs such as clothing, bicycles, farm tools/machinery and books. Some of Adelaide’s population will need to disperse to rural areas and a greatly expanded public transport sector will be needed to provide mobility for the rest. Long-distance transport between Adelaide and other regions and capitals should be by rail which is far more energy efficient than road freight. The cost of air travel will be beyond the reach of most people and the era of mass tourism will be at an end. Finally, computer modelling performed as long ago as the 1970s has shown that the only way for a society to be sustainable in the longer term is if its population numbers do not increase. (In our finite world, the ultimate result of continuous population growth can only ever be misery and starvation).

The South Australian government is now moving to run public transport on biodiesel and natural gas. Its a shame the Sydney public transport system isn't trying to take some forward steps (though simply running a train system that runs somewhere near schedule and has the same number of trains running as the previous week seems to be enough of a challenge for them).

"This clean fuel initiative is part of our State Government plan to reduce greenhouse gas emissions and fuel consumption by doing our bit for the environment," Mr Rann said. "Together with the extensive use of compressed natural gas in buses and the purchase of new Euro 4 standard emission buses, this will make our public transport system fleet the cleanest in Australia."

About two-thirds of the 810-bus fleet will run on biodiesel, with the remainder using natural gas. Mr Rann repeated his call for a meeting of Australian governments on greenhouse emissions. "We as a state are committing to Kyoto, but it's shameful that Australia and the United States are the only two industrial nations in the world that are refusing to sign up," he said.

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The Fire Has Begun  

Posted by Big Gav

Mike Ruppert is a bit of a nut, but he does have a gift for paranoid conspiracy theories - and he's quite adept at collecting peak oil related information.

His latest missive, "The Fire Has Begun", contains a whole lot of snippets (a fair few of which I've linked to here) including this gem of a quote from Matt Savinar on the upside of Peak Oil (as seen from the doomsday camp):

"When people ask me what is 'positive' about Peak Oil, I tell them (only half-jokingly) that: "well, if there is no collapse, we're all going to be chipped, tagged, drugged with FOX news being beamed into our brains while living in slums patrolled by robotic soldiers with strangely familiar Austrian accents."

He also references Marshall Auerbach's latest economics essay, "The Militarization Of Oil" (didn't that happen a long time ago) which describes how the US army is now "a global oil-protection service".

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Flex Fuel Hybrids  

Posted by Big Gav

WorldChanging (which I'm having trouble keeping up with these days) also has a good snippet on hybrid cars with "flex fuel" engines that will run on a variety of fuels

Fareed Zakaria's piece in Newsweek suggested that plug-in hybrids combined with flex-fuel engines could greatly reduce our dependence on petroleum. We've talked about plug-in hybrids before, so what's this about flex-fuels?

Broadly put, flex-fuel vehicles are those which can run on a variety of fuels, not just gasoline. While most gasoline engines will run acceptably on mixtures of a small amount of alternative fuel (e.g., ethanol) with gasoline, flex-fuel engines are designed to handle much greater amounts of non-petroleum fuel. "E85," or a mixture of 85% ethanol and 15% gasoline, is a flex-fuel choice with some automaker support. This article at the World Business Council for Sustainable Development provides an overview of non-petroleum fuel options; generally speaking, the ones which include "mixed" or "blended" forms in the description are suitable for flex-fuel use.

An advanced flexible engine technology, HCCI, offers a greater range than most flex-fuel engines. As we noted in August, Fiat will be introducing an HCCI engine design in Brazil able to use four different fuels -- gasoline, diesel, ethanol and natural gas. HCCI engines have significantly lower emissions and much greater efficiency than regular internal combustion engines, but they're also much trickier to design and maintain.

Commodity Markets Waking to Resource Depletion  

Posted by Big Gav

WorldChanging notes that commodity (particularly energy) prices are soaring due to resource depletion.

I think this is due to a combination of factors - consumption growth (driven largely by China), industry consolidation (with a lot of mergers amongst big miners and oil companies in recent years, they have regained a lot of pricing power) and infrastructure bottlenecks (in Australia at least, we simply can't ship the stuff out fast enough to meet demand) would really seem to be the main drivers.

Resource depletion would seem to be any issue in only limited areas at this point - specifically oil and natural gas. And even in these cases, some of the constraints may still be structural - for an example, a Goldman Sachs report I read recently noted that the mix of crude oil being pumped has a greater proprotion of heavy, sour crude than used to be the case. The refineries that can process this type of oil are apparently working at full capacity, and new refineries are not coming on stream (or being converted) fast enough to handle the increased volume available. They even speculated that OPEC would have to cut back on production of heavy oil as storage tanks were filling up the stuff and there was going to be nowhere to put it.

Bloomberg reports that even financiers and hedge-fund analysts are waking up to resource scarcity: "Commodity prices surged to a 24-year high, led by gains in copper and crude oil, on concern that global economic growth is eroding inventories of raw materials faster than supplies can be replenished." And speaking about oil prices they quote a Citigroup analyst who said "OPEC is pretty powerless to lower prices. If OPEC boosts output the bulls will say that there will be less spare capacity."

Peak Oil In Queensland  

Posted by Big Gav

A Queensland state government member makes a speech about peak oil in parliament.

Let me conclude with this simple statement of fact. Peak oil is coming—soon—and no alternative energy source available to us today or in the foreseeable future is going to make up the total energy shortfall. The beginning of the end of the oil age is upon us, and it is time to respond fully to that challenge. The petroleum bill before the House is a necessary step in that process. I congratulate the minister on this reform as well as on last year's Petroleum and Gas (Production and Safety) Act and the Petroleum and Other Legislation Bill that collectively regulate and encourage the exploration and development of petroleum and gas resources in Queensland. I commend the bill to the House.

First time I've seen a non-Greens MP talk explicitly about peak oil.

Onward to Iran  

Posted by Big Gav

Richard Heinberg has a new article out about the forthcoming US attack on Iran.

A US attack could have serious implications for international relations. Iran has spent the past few years cementing economic and military ties with Russia, China, and the EU, and such efforts have intensified dramatically within past weeks. These nations, to varying degrees, view the US as a superpower that has outlived much of its usefulness to the rest of the world. The US is now a liability in many respects: its immense national debt and trade deficits weigh down the global economy; its profligate consumption of resources leaves less to go around for other nations; its refusal to sign the Kyoto accord ensures a century of environmental collapse; and its arrogant militarism serves to undermine any hopes for cooperative solutions to future contests over dwindling resources. No government wants to take on the US militarily. But Washington appears determined to control the chokepoints of global resource flows. Thus the leaders of China, Russia - and to a lesser extent even those of the EU - would in their own view be acting in self-defense by drawing a line in the sand around Iran. Indeed, in recent weeks Russia has begun selling some of its more advanced missiles to Syria, Venezuela, and Iran, just as the US has amped up its rhetoric against these countries.

End of suburbia draws nigh  

Posted by Big Gav

The Toronto Star has an article about the upcoming screening of "the end of suburbia" on Canadian TV.

Some times I think some people over dramatise car dependence - sure, life will become a lot more miserable when you can't avoid to drive everywhere buts its not world ending. It wasn't that many years ago that people made their way from the outer suburbs into the cities by bus (thats my memory of growing up in the 1970's in Australian suburbia anyway).

And anyone who has ever spent time in the third world and travelled like a local does knows you can squeeze a lot of people into a mini-bus - even cities that don't implement decent public transport systems will find small commercial bus networks springing up pretty quickly.

Maybe its time for Simmons and Kunstler to visit Nairobi for a vision of the future :-)

The one-hour special, which airs Wednesday at 10 p.m. on Vision TV, should be a wake-up call to all those denizens of sprawl. If the talking heads who appear in this compelling and deeply disturbing Canadian-made program are right — and they most assuredly are — North America had better figure out new ways of living that don't depend on cheap, plentiful oil.

Perhaps the most compelling expert on hand, Matthew Simmons, chair of the largest energy investment bank in the world, puts the case against suburbia very eloquently.

"Everything in society we cherish ended when the blackout (of August 2003) came," Simmons states. "If that wasn't a fire drill for how important energy actually is ... but people didn't get it. I don't think we actually learned a thing from it."

Indeed, as other speakers make clear, rather than deal with these issues, we simply elect politicians who aid and abet our refusal to get real.

Their argument is simple: suburbia couldn't exist without cars, and people couldn't afford to drive those cars without endless cheap gas. As they also make clear, the amount of oil pumped out of the ground is expected to peak sometime between now and 2010 at the latest. After that, every gallon of gas grows more and more expensive, rendering auto-based sprawl obsolete.

"The whole suburban project can be summarized pretty succinctly as the greatest misallocation of resources in the history of the world," explains author James Howard Kunstler. "America took all its post-war wealth and invested it in a living arrangement that has no future."

Of course, Kunstler is right on the money with regards to the wisdom of resource allocation - building compact european style cities would have been a smarter move for those of us in countries that consist almost entirely of swathes of suburbia.

Collapsing Upwards  

Posted by Big Gav

With "The long road down: decline and the deindustrial future" giving us the choice between apocalyptic collapse and a slow, endless decline, it is perhaps worth considering that a lower energy future doesn't have to be a worse future.

WorldChanging has a good article called Collapsing Upwards that discusses the possibility that things could actually be better down the track (admittedly its easier to imagine this scenario in places like Europe and Brazil, or even Canada, than it is in the United States).

Mitigating the Effects of Peak Oil  

Posted by Big Gav

Green Car Congress has also picked up the DOE's report on Mitigating the Effects of Peak Oil. Apparently this report was produced by SAIC rather than some internal bureaucrat (which explains how it wasn't simply squelched).

Latest ASPO Newsletter Out  

Posted by Big Gav

The ASPO's latest newsletter is out. This one includes The Australian's peak oil article and the usual assortment of peak oil related snippets, including a paper on mitigating the the effects of peak oil from some people at the US Department of Energy (which is pretty much contrary to their usual statements). No new updates to the depletion model have been done.

One snippet discussed the prospect of Indonesia following Ecuador and Gabon's lead and leaving OPEC - once a country has no excess capacity it has no reason to try to limit production - which means OPEC itself may be redundant in the near future (just as the Texas Railroad Commission basically abandoned production controls in the US after their Hubbert's peak in the early 1970's). As the newsletter says, OPEC could "spare itself a lot of political odium by closing its doors".

The most interesting part was their analysis of uranium depletion and why uranium isn't a solution to the global warming problems caused by fossil fuel use (which Monkeygrinder has already posted on). The article was originally published on Online Opinion, which I haven't come across before (although I have seen them mentioned on Crikey recently).

However the emerging economies of China and India are setting the pace for growth and rising energy demand, so to meet their aspirations the initial requirement for the building of 20,000 nuclear power stations is likely to be insufficient. In reality there is little chance of fuelling the current modest building program of new stations as secondary sources of uranium are expected to be exhausted by 2012, creating a shortfall in supply unable to be filled by additional mining, so the first desired characteristic of sustainability is unattainable.

Then the claim for the carbon-free status of nuclear power proves to be false. Carbon dioxide is released in every component of the nuclear fuel cycle except the actual fission in the reactor. Fossil fuels are involved in the mining, milling and enrichment of the ore, in the fuel can preparation, in the construction of the station and in its decommissioning and demolition, in the handling of the spent waste and its re-processing and in digging the hole in the rock for its deposition.

The lower the ore grade, the more energy is consumed in the fuel processing, so that the amount of the carbon dioxide released in the fuel cycle depends on the ore grade. Only Canada and Australia have ores of a sufficiently high grade to avoid excessive carbon releases and to provide an adequate energy gain. At ore grades below 0.01 per cent for “soft” ores and 0.02 per cent for “hard” ores more CO2 than an equivalent gas-fired station is released and more energy is absorbed in the cycle than is gained in it. Ores of a grade approaching the “crossover” point such as those in India of 0.03 per cent, if used, risk going into negative energy gain if there are a few “hiccups” in the cycle.


The article doesn't see nuclear power as a long term solution to anything, but it does emphasise that the world's quality deposits of uranium are in Australia and Canada, and that these will be used to fuel what growth in the industry does occur.

Meanwhile XStrata is putting the hard word on WMC shareholders and ERA is muttering about opening up Jabiluka.

The Hunt For Methane Hydrates  

Posted by Big Gav

Rigzone reports that a US vessel has been sent forth in search of methane hydrates. There's more than one way to extinguish all life on the planet.

Aboard the Uncle John -- When this semi-submersible drilling vessel enters the Gulf of Mexico later this month it will embark researchers on a 35-day voyage of discovery that is part of an effort to map a virtually inexhaustible supply of energy - the methane hydrate that may represent up to 200,000 trillion cubic feet of natural gas.

The expedition will take the next major step in understanding a potentially huge energy resource trapped in methane hydrate, called the "ice that burns" because it releases a flammable gas when it melts. The resource is found far beneath the surface in waters along the U.S. coast and the permafrost of Alaska. Today's recoverable non-hydrate methane resource pales in comparison at an estimated 1,400 Tcf.

Zero Hour: Disaster at Chernobyl  

Posted by Big Gav

Given the vigourous renewed push for nuclear power this year, I thought tonight's program on the Chernobyl accident quite appropriate.

As I watched the (reenacted) disaster unfold, the combination of construction problems, design flaws and operator mistakes reminded of the old Usenet comp.risks newsgroup and many of Bruce Schneier's columns - the more complex a system becomes, the more likely it is to go wrong at some point. Once a system becomes sufficiently complex it is basically impossible to test all possible scenarios - and you can guarantee that some scenario will result in system failure and that one day you'll encounter this scenario.

Still - there can be some unexpected positive side effects of these disasters (such as involuntary parks), but on the whole I think a massively expanded nuclear power industry is bound to result in some entirely predictable failures at some point in the coming decades.

Horse dung up to our ears  

Posted by Big Gav

The Herald's WebDiary has a cornucopian follow up post to their earlier peak oil article called Horse dung up to our ears. It is yet another example of what Colin Campbell calls "flat earth economics" - the author (an ex Shell PR man) spouts all the usual arguments about when you start running out of a resource another one will magically appear to take its place or technology will magically increase in efficiency to provide expanding quantities of energy from a dwindling supply base. His argument seems to revolve around horse dung in London once being a problem but that no longer being the case - ipso facto - peak oil isn't a problem.

As commenter Darren Urquhart said:

We were somewhere around Byron on the edge of the beach when the exhuast vapours began to take hold. I remember saying something like “we’re out of oil, we’re gonna crash”. And suddenly there was a terrible roar all around and a voice screaming “Horse shit! Science will protect you.”

Local abiotic oil nut Louis Hissink makes a brief appearance to say even technology isn't relevant - oil supply is infinite (to which one poster quoted a Rockefeller - "If the earth was made of oil, the supply of it would be finite").

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