Monday, September 04, 2006

The Looming Tale of Oil.

BBC Radio 4 have launched a new four-part series about the end of the oil-era. It is broadcast on Monday mornings at 9.00 (GMT), the first of which was earlier today. As I have explained in previous postings, "Peak Oil" is the moment when the world begins to run out of cheap oil. It is thought that this fulcrum of events will tip-over any time now, and likely by 2010. Then a plateau in production can be expected for a couple of years, beyond which it will decline by about 2% per year. In concord with this conclusion, based on a Hubbert Peak analysis of world oil production, all the major fields in Russia, Saudi and Mexico are according to some experts, already showing a fall in output and need to be squeezed harder by technology to maintain output in pace with demand. We have seen too, that the price of crude oil in increasing, and this has an ironic influence on the oil industry overall, namely that as certain price "milestones" are reached (e.g. $100 a barrel and so on), it becomes feasible to extract oil from "difficult" reserves. BUT, that means the price goes up!! So, to labour that point, we are running out of the cheap oil that has powered the industrial world, not oil itself. That is both worrying and reassuring, meaning that survival is possible but only if we find some alternative to oil to valve-off pressure of demand.
An "elephant field" is the term used in the industry to describe a very big reserve. I had thought that no more of these had been discovered for decades, however this morning's programme put me right on this, and it seems that using advanced seismic techniques, where sound-waves are transmitted and reflected through rock-strata, to "x-ray" for oil, such "elephants" are still being located. However, the quality of the oil contained therein and how much can be feasibly extracted therefrom are major points of issue. The final frontier where the elephants live is in ultra-deep water, in sediments at depths of below 10,000 feet. Exploration and extraction from these regimes is on the increase, as it must be since there is nowhere else left to drill.
It was pointed out that the U.S. (and the U.K. and most countries of the industrial world and wanabe industrial economies of Asia) is in a state of complete denial that such an imminent situation exists. It is simply too uncomfortable to contemplate. We have to save oil, but for that to happen, people must believe unequivocally that it is necessary to do so. George Bush has been reported as saying that there is a problem of "oil dependency" but did his scriptwriters use the word "crisis"? And if he read it out, did anybody really believe him?
In short, there is a need to form a "war-plan", but the fact there is an enemy must be laid on with a trowel. There is a need to focus on "better" not necessarily "more". The post-"Peak Oil" age doesn't have to play-out in an apocalyptic scenario, with us all milling in the background as extras in a "Mad Max" movie. We should not think of our predicament as a war over oil (that will merely trigger future conflicts as has fuelled wars in the past. Indeed, all wars are fuelled by oil!), but with "oil dependency" as the enemy, and the culture grown around that which has destroyed important life-elements of human quality, such as "the family". Mankind will not want to turn to a life of "frugality", and with careful planning does not need to. However, a world where every American, European, Chinaman, Indian and South American drives a Hummer is simply not sustainable. I doubt it is even desirable. The west has sent-out the wrong messages to itself and to the developing world: that our ways are all right and theirs are entirely primitive and outmoded. We may learn from each other.
It is energy not money that powers the world fundamentally: the latter is just a system of counters that ultimately only represents the real raw materials, of oil, gas, coal, uranium, gold, platinum, silicon and so on that underpin global world trade. If we had started on our plan for the post-"Peak" world thirty years ago, we would be in better shape to face what is at hand, and still with some slack left. But that is, I suppose, only in the nature of "denial", and acting today is better than waiting until tomorrow. Speak-out, our leaders (Bush and Blair), and prepare us for the inevitable!

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