Peak Oil

In many ways, the folks who say we a have lots of oil are correct. All one has to do is include the oil which is extremely expensive and slow to extract. Much of the cheap, easy-to-extract oil has already been removed. Economic theory says if/when prices rise our pocketbooks will dictate finding an alternative. The alternative will relieve price pressure on the oil causing the price of oil to drop. When oil prices rose, we found substitutes, but they were poor substitutes.

Economists like to suggest that energy is like any other commodity, and that one energy form can be substituted for another. The term is "elasticity". But it shows they are lost in their equations and have no common sense. Obviously oil serves a different function than coal, but they're both "energy". Hence if you convert all forms of energy into BTU's you can equate miles per kilowatt-hour to miles per gallon and pretend they're the same when they're not.

Dubai is going through an economic melt-down. They've been in a massive growth phase and it's financed by debt expecting that there would be a continuous influx of tourists. Dubai doesn't have its own oil. They've been building a wonderland, but the system depends on people flying to their island. Flying requires fossil fuel. And because of peak oil fossil fuel is due to run short soon, and it seems like an obvious folly for them to have done this thing. But here they are.

“The tarsands are the roadblock to Canada signing onto a meaningful target,” said Eriel Tchekwie Deranger, a climate-change activist and member of the Athabasca Chipewyan First Nation in Alberta. The point is that the tarsands are a bad bad bad bad story, and it's on Canada's head. The world on the one hand is looking to Canada to fill in the gap between oil demand and oil production with those tar sands. Environmentalists would prefer that oil simply go away, and tarsands will act to keep the oil business alive, plus the tarsands are just a nasty way of producing oil.

One of the conclusions which can be drawn from deconstructing the 2009 WEO, the IEA's forecast of energy supply and demand out 20 years to 2030, is that the IEA estimates that the average new vehicle sold in Japan in 2030 will have to attain on average 85 miles per gallon. The WEO2009 report contains projections of oil usage based on 4.6 barrels per capita consumption, and assuming population growth at current rates.

Supposedly we have nothing to worry about. Oil supplies are dwindling, we're stuck in a society that's addicted to oil, and we have nothing to worry about. Sounds like delusion and denial doesn't it? U.S. oil consumption, which peaked at almost 21 million barrels a day in 2005, is now under 19 million barrels a day, according to the Energy Information Administration. The article talks about "energy intensity" which is a measure of how much a society does based on the energy it expends. In other words efficiency.

Whistleblowers claimed the IEA figures were unreliable and subject to political manipulation – something the agency categorically denies. But the subject of oil reserves touches not just energy and climate change policy but the wider economic scene, because hydrocarbons still oil the wheels of international trade. Even the Paris-based IEA admits that the world still needs to find the equivalent of four new Saudi Arabias to feed increasing demand at a time when the depletion rate in old fields of the North Sea and other major producing areas is running at 7% year on year.