July 10th, 2007 by John
Oil supplies are likely to be tight in the next few years and  prices will reach new heights according to a report yesterday from the International Energy Agency. This leaves us in a very vulnerable position if there are cuts in supply due to Middle East turmoil or terrorist attacks on oil installations and pipelines.
Demand is expected to reach nearly 96 million barrels a day by 2012 and even without the above possibilities it is doubtful whether that will be achieved as some major oilfields now have declining production.
James Moore in The Independent reported:
“The demand will be driven by the fast growing economies of Asia and the middle east, where the thirst for black gold will grow more than three times faster than the 30 industrialised members of the Organisation for Economic Co-operation and Development. That is because several countries in those regions are set to break the $3000 per capita income level, when consumers can afford to buy energy-consuming products such as cars and white goods.”
Our farming and distribution industries have been built on cheap, reliable and plentiful oil supplies. Expensive, unreliable and short supplies will not do. It will only take one major event that reduces supplies further to cause panic and the hoarding of both oil and food, making the problems even worse.
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June 21st, 2007 by John
In an excellent article in Business Week, Eugene Linden explains the meaning and possible consequences of Peak Oil.
“Peak oil refers to the point at which world oil production plateaus before beginning to decline as depletion of the world’s remaining reserves offsets ever-increased drilling. Some experts argue that we’re already there, and that we won’t exceed by much the daily production high of 84.5 million barrels first reached in 2005. If so, global production will bump along near these levels for years before beginning an inexorable decline.
“What would that mean? Alternatives are still a decade away from meeting incremental demand for oil. With nothing to fill the gap, global economic growth would slow, stop, and then reverse; international tensions would soar as nations seek access to diminishing supplies, enriching autocratic rulers in unstable oil states; and, unless other sources of energy could be ramped up with extreme haste, the world would plunge into a new Dark Age. Even as faltering economies burned less oil, carbon loading of the atmosphere might accelerate as countries turn to vastly dirtier coal.”
Surprisingly, no mention is made of what this would mean for food production, but as more coal burning would accelerate climate change with negative effects on farming, and as food production in the West is totally dependent on oil and gas inputs, we can safely say that Peak Oil equals Peak Food and declining oil equals declining food.
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Peak Oil is sometimes called ‘Hubbert’s Peak.’ Marrion King Hubbert, a Shell geologist predicted in 1956 that US oil production would peak around 1971. His prediction was not believed by the U.S government or even by most other prominent geologists and oil companies, but he turned out to be correct. He said that production in the U.S would follow a bell shaped curve, rising steeply, reaching a peak in 1971 and then falling.
Hubbert also predicted that world production would follow a similar pattern. Many geologists and oil experts have in the last few years concluded that he was correct in that too, and indeed in many other countries, especially high consumption countries, production is already declining, leaving us more dependent on the Middle East.
When North Sea production went in to decline in 1999, the oil companies and the UK government seemed to have been taken by surprise. They had not predicted such an early peak and were reluctant to admit it had actually happened.
There are gigantic amounts of oil left, but when world oil production reaches its highest level ever, a level never to be repeated and to be followed by a decline, a mad scramble will begin and panic will prevail simply because we cannot manage with less in the face of rapidly increasing demand from Asia, especially China and India.
There are many different estimates of when Peak Oil will happen, mainly because it is impossible to get accurate reserve figures from producing countries, especially OPEC members who are thought to have lied for years about their reserves in order to have a high production quota.
Some experts think we are at or near to peak already and point to the fact that very high prices during the last few years have not led to big production increases as would be expected. Other experts think that around 2010 is the most likely time while others think it could be more then 20 years away.
What is not in dispute is that oil and gas are finite resources and will peak at some time. We need to be urgently working on ways to allow food production to continue when the peak arrives.
The solutions section of the book, Famine in the West, describes my thoughts on how this can be done. What are your thoughts?
