Sunday, January 27, 2008

A warning from those who know.

Second UPDATE:

The Peak Oil Crisis: The Future of Our Cars – Part 3
Written by Tom Whipple Thursday, 07 February 2008


First UPDATE:

The Peak Oil Crisis: The Future Of Our Cars – Part 2
Written by Tom Whipple Thursday, 31 January 2008

Tom mentions electric cars as one solution - but that is not a viable option. The director of economic development of our state told me personally that they have already had to turn away business developments in the state because the electric grid is at capacity, it can't take much more pressure. Adding millions of cars to the electric grid without seriously upping production of electricity is a non-starter.

ORIGINAL POST:

If you recall from an earlier post, the CFR's Matt Simmons was telling his big business cronies they are making plans to ration gasoline, diesel, and heating oil within the next 7 years. Now big oil is signaling that they intend to go along with the plan.

Shell chief fears oil shortage in seven years
Carl Mortished, UK Times
World demand for oil and gas will outstrip supply within seven years, according to Royal Dutch Shell.

The oil multinational is predicting that conventional supplies will not keep pace with soaring population growth and the rapid pace of economic development.

Jeroen van der Veer, Shell’s chief executive, said in an e-mail to the company’s staff this week that output of conventional oil and gas was close to peaking. He wrote: “Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand.”

The boss of the world’s second-largest oil company forecast that, regardless of government policy initiatives and investment in renewables, the world would need more nuclear power and unconventional fossil fuels, such as oil sands.

“Using more energy inevitably means emitting more CO2 at a time when climate change has become a critical global issue,” he wrote.

Mr van der Veer is expected to discuss Shell’s energy outlook today at the World Economic Forum in Davos.
(25 January 2008)
Interview with van der Veer by New York Times.
Shell deserves credit for wanting to be part of the climate change solution (The Scotsman)
The letter sent to Shell employees (TOD)
Excerpts and comments by Big Gav

Contributor David Strahan comments:
Jeroen van der Veer forecasts peak in 2015, in effect

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Seven years may sound like an eternity but it most certainly is not. You need to have yourself situated in a place that is within walking distance of schools, groceries, mass transit lines, and relatives who may need your help. This will require most of us to do a massive shuffling of our housing and even jobs. From this point forward, every dollar you waste on an SUV, suburban home far from necessities, and "business as usual" habits of consumerism is a dollar you may as well have flushed down the toilet. The time to prepare for the inevitable upcoming reality is now, while you still can (if you still can). Private automobiles will be DEAD LAST on the priority list for gasoline, IF they're on the list AT ALL for future hyperexpensive/scarce resources. The government, fire department, police, ambulances, military, and food transportation will get top priority - they HAVE to have gasoline, you don't. And this will happen long before gasoline actually becomes so scarce that rationing is put into place, due to the simple fact that your federal, state, and local government and emergency services cannot afford to pay for gas AS IT IS, MUCH LESS when prices continue to rise.

The ONLY way to truly control prices will be for the government to enact DEMAND DESTRUCITON - meaning eliminating all the competition for gasoline (since nationalizing oil companies is unlikely, IMHO). That competition is you and your cars. If it weren't for your cars, there would be no danger of shortages or astonishing price hikes - that's a fact. So your cars will be eliminated from the equation. This is not speculation - this is a warning laid out to you in advance. Start now arranging your life to do without your cars, because if you wait until everyone else is, you will have no real options available.

Only a blind man can't see this coming - and he can hear it, class. You are responsible for knowing what is going on in the real world and preparing for it - nobody owes you a living, food, transportation, or anything else. Don't expect other people to solve your problems - we've had far too much of that already. So don't say nobody told you so, or you expected a miracle to fall out of the sky - because it won't. Technology is not energy. Energy cannot be replaced once used.

BTW, Your failure to plan now does not constitute an emergency on my part later, so don't ask.

See also:

The peak oil crisis: The future of cars – part 1 by Tom Whipple
Published on 24 Jan 2008 by Falls Church News-Press. Archived on 24 Jan 2008.

...Something has got to give. That something is going to be the affordability and availability of gasoline and diesel for fuel. The problem will be on us within the next five to ten years. When shortages develop and rationing starts, fuel for the private car will be close to the bottom of the priority list along with fuel for lawn mowers, leaf blowers, recreational boats, and my personal favorite as the worst possible use for a precious resource -- sky-diving. So what is going to happen?

6 comments:

Garnel Ironheart said...

The problem with these predications is that they are ALWAYS wrong. In the early 1970's the Club of Rome predicted that by 2000 the Earth's supply of tin, iron, copper and natural gas would be exhausted. In the mid-late 1970's during the Arab embargo, we were told that Saudi Arabia was about to run dry.
Since then technology has been developed to all Alberta to process its tar sands into usable oil. A huge deposit has been found by the Hibernia project off the shores of Newfoundland and there's another potential one under Canada's Arctic islands. There is no shortage of oil, just a perceived one that will allow Big Oil to jack up the price of gasoline at the pumps. I ain't moving.

Ahavah said...

M K Hubbert was not wrong - in fact, in spite of being harassed, ridiculed, and being fired from his USGS job he was absolutely right. Oil production in the US peaked exactly when he said it would in the 70s.

You're confusing feasibility with affordability. We can take tourists to the moon, too - but at what cost and who could afford it? Not you. Not me. There were two shows on the History Channel last night which laid out the problems plainly - it takes oil to make oil, and at the point where it takes just as much if not more than a gallon of gas to make a gallon of gas, you're going out backwards instead of making progress. And if the final products costs so much that nobody can afford to buy it, then you've also not made process.

It's not about "running out of oil," it's about the US/Canada not being able to compete with countries like china, india and russia that still have a real economy with factories and hard assets and that can and will outbid us for the reduced amount oil that is available.

Oil production worldwide has declined 6% per year vis-a-vis our needs every year for the last three years (peak world production was in 2005). That means there's 18% less oil available than there was 3 years ago. In three more years, that will be 36% less oil available. In 9 years, that will be 54% less oil available. It's not rocket science. It's economic reality.

We have extracted all of the easily extractable, high quality oil that exists. From now on, what we extract will be more expensive and of lesser quality and quantity. How do you think things can stay the way they are? Planning to wave a magic bracha and make the shortages go away? Well, good luck with that.

Garnel Ironheart said...

Things never stay the way they are but they don't always move in the direction they're supposed to either.
Consider: 90% of pregnancies in Russia (outside the Muslim areas, mind you) end in abortion. Putin's mad rush to restore Russia's glory comes at a time when there may be only 35-40 years left before there aren't enough Russians to run the country, let along field a real military.
Japan's population is already shrinking as, unlike Russia and Europe, they don't have an exploding Muslim underclass Their education system is a shadow of what it once was so in 25-30 years the people who are working won't be able to do the high-power high-paying jobs that will support the government pensions of the elderly.
As for Europe, let's not go there.

You are also discounting the advances technology makes. If it costs more than a barrel of oil to get a barrel of oil out of the ground, then the oil companies won't make a profit. They want to make a profit which means a strong push to develop the technology needed to make extraction easier.

Remember in the late 1970's people said that Alberta's tar sands would NEVER become economically feasible. So much for that.

Ahavah said...

The Albert tar sands STILL aren't economically viable or they'd ALREADY be in full production - which they aren't. And according to wikipedia, even if full production could be implemented, the tar sands would not supply all of Canada's annual need for oil. Shortages of 30-40% annually would still occur - meaning price will go through the roof even more than the inflated baseline of tar sand production costs. Hope you can afford that. The fact that the price of gasoline has gone up 200% in the last four years ought to be a clue that there is not and will not be sufficient product available for everyone who wants to use it. Canada, like the US, will have to put civil service, food transportation, and emergency services far above private automobiles in priority. Neither Canada nor any other western country will be able to presume they can receive imports from anywhere else to fill their need. Even middle eastern countries are now experiencing a surge in domestic demand that will have to cut into their exports to be met.

BTW, the US and Canada would already be in population decline if it weren't for immigration - so what's your point? None of the countries you listed are china, india, indonesia, south america or other places with exploding populations of people (muslim or otherwise) who want to live a modern middle class lifestyle. They outnumber the west by a longshot and will continue to do so into the forseeable future.

And I'm not "discounting" advances in technology - I'm understanding there is a difference between technology and energy. Technology uses energy - and there is no substance known on earth that will push your 5000 lb SUV and you and all your junk in it as economically as gasoline. The amount of BTU's of energy required has no other viable alternative - not even electric, since our overtaxed grid is already groaning under the weight of its load as it is, much less adding a few hundred million cars to it.

Garnel Ironheart said...

First of all, calm down. I'm trying to have a discussion here and I don't need the insults back. I don't own an SUV. I drive a small compact car exactly because I don't want to waste gas. The thermostat in my house in the winter is set to 66 F to avoid overuse of electricity and heat. I turn all the lights and computers in my office off at night. So we're not as far apart as you think.

However, I would caution against using Wikipedia as a source of information. I don't think it's yet to be considered a serious source of scholarly information.

The tar sands are quite viable which explains why Alberta's economy is growing by leaps and bounds. Now, granted a lot of that has to do with $90 barrels of oil and if it drops to $50 they probably wouldn't but if my grandmother had wheels, she'd be a wagon. Right now oil is $90 so viability is there.

Further, China is another case of impending population implosion, courtesy of their one-child and totalitarian policies. The best and the brightest leave for the US while the remained are having kids below replacement levels and (this is the important parts) selectively aborting female foetus on a massive scale. I've seen one estimate that says that within 25 years there will be 100 million Chinese men for whom there will be NO women to marry. Can't sustain a population that way.

Finally, I would agree that our culture of consumption is hugely excessive and overtaxing our resources. I would argue, however, that humanity has run up against that challenge before and somehow always overcome it. I don't doubt that will happen again.

Ahavah said...

China has not reduced their population, they have only slowed the rate of growth. Also, they are now allowing a second child in selected rural farming areas that have experienced mass migration to urban areas. I have posted a population chart for your reference under the "peak oil" heading. This came from the BBC, not wikipedia.