Thursday, April 03, 2008
“Peak oil” is shorthand for the understanding that there is a finite amount of oil in the world and at some point we will hit a production peak, after which oil production will steadily decline until supplies are effectively exhausted. Present oil reserves took nearly 550 millions years to form and with current consumption rates, there is no possible way to replenish the resources before they are used up. However, the concept of peak oil is not only about the decrease of production, but also the end of cheap oil. As oil fields are depleted and the discovery of new fields decreases, oil becomes harder and thus more expensive to produce . . . .Elsewhere, our esteemed colleague Joseph Romm explains why it was perhaps not the best idea to put a brace of corrupt oilmen in charge of America's energy policy:
[J]ournalists have been slow to explore its connection to current oil issues. Are rising prices at the pumps a result of the weakening U.S. dollar, low petroleum supply, or both? Could OPEC’s decision to not increase production rates be an acknowledgment of limited field capacities and diminishing reserves? While we won’t know that we have reached the world’s oil production peak until years after it happens, these questions are worth asking and the concept worth exploring.
The falling dollar has been made the culprit in many stories around the globe about rising petroleum prices. A March 4 article in the Los Angeles Times claimed market trading and the Federal Reserves’ interest-rate cut, which affected the value of the dollar, were to blame for $100-plus barrel prices. Peak oil was not mentioned once in the entire article. Articles the same day in USA Today and The Washington Post
A flood of articles about OPEC rebuffing President Bush’s plea for higher production also failed to mention peak oil. A March 6 New York Times article goes so far as to say: “Most energy analysts agree there is no shortage of oil.” Maybe, but to what degree does -- or should -- an undetermined, but almost certain, future shortage weigh on decision makers in the present also concentrated purely on the stumbling dollar as the cause of rising prices?
Many of us have predicted for a very long time that a quarter century of ignoring or underfunding the key solutions to our addiction to oil would have consequences. For instance, an April 1996 article I coauthored warned about what the Gingrich Congress was trying to do:Congressional budget-cutters threaten to end America's leadership in new energy technologies that could generate hundreds of thousands of high-wage jobs, reduce damage to the environment, and limit our costly, dangerous dependency on oil from the unstable Persian Gulf region.
Now, absent an aggressive set of government-led policies, the oil situation will only get worse, with oil and gasoline prices doubling (or worse) in the next quarter century. Crucially, we must solve our oil addiction and carbon addiction together, and soon. Fatih Birol, chief economist of the International Energy Agency, said in November:These two things put together, the short term security, medium term security of our oil markets, plus the climate change, consequences of this energy use, my message is that, if we don't do anything very quickly and in a bold manner, the wheels may fall off. Our energy system's wheels may fall off. This is the message that we want to give.
The problem is urgent. And the solutions are known.
Clearly we now have only two realistic strategies -- indeed, we have had only two realistic strategies for decades. We must greatly increase the fuel economy of our vehicles, and we must find one or more alternative fuel sources that are abundant, low-carbon, and affordable. Both of these are strategies that conservatives have strongly fought for a long time.
Just to be clear, let's just say we adopted the favorite strategy of conservatives (more supply) and we opened the Arctic National Wildlife Refuge to drilling, and we found enough to provide one million barrels a day for 30 years. That would delay the peak in oil one whole year! Catastrophe not averted. And, of course, it would only make global warming harder to fight. More domestic supply is not the solution.
Significantly, both Senators Clinton and Obama have announced plans to sharply increase fuel economy standards. As for McCain, one of his top economic advisors recently said that if his cap and trade system worked well enough, he might take the new standards off the books. That shows the McCain campaign does not understand what it will take to solve either the global warming or the peak oil problem.