UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

August 3, 2009

EXPERT: OIL SUPPLY RUNNING OUT FAST

Independent, UK - The world is heading for a catastrophic energy crunch that could cripple a global economic recovery because most of the major oil fields in the world have passed their peak production, a leading energy economist has warned.

Higher oil prices brought on by a rapid increase in demand and a stagnation, or even decline, in supply could blow any recovery off course, said Dr Fatih Birol, the chief economist at the respected International Energy Agency in Paris, which is charged with the task of assessing future energy supplies by OECD countries.

In an interview with The Independent, Dr Birol said that the public and many governments appeared to be oblivious to the fact that the oil on which modern civilization depends is running out far faster than previously predicted and that global production is likely to peak in about 10 years - at least a decade earlier than most governments had estimated.

But the first detailed assessment of more than 800 oil fields in the world, covering three quarters of global reserves, has found that most of the biggest fields have already peaked and that the rate of decline in oil production is now running at nearly twice the pace as calculated just two years ago. On top of this, there is a problem of chronic under-investment by oil-producing countries, a feature that is set to result in an "oil crunch" within the next five years which will jeopardise any hope of a recovery from the present global economic recession, he said.

In a stark warning to Britain and the other Western powers, Dr Birol said that the market power of the very few oil-producing countries that hold substantial reserves of oil – mostly in the Middle East – would increase rapidly as the oil crisis begins to grip after 2010.

"One day we will run out of oil, it is not today or tomorrow, but one day we will run out of oil and we have to leave oil before oil leaves us, and we have to prepare ourselves for that day," Dr Birol said. "The earlier we start, the better, because all of our economic and social system is based on oil, so to change from that will take a lot of time and a lot of money and we should take this issue very seriously," he said.

7 Comments:

Blogger Samson said...

The theories I've read predict that we'd see large fluctuations in the price of oil both up and down as we sit roughly at the 'peak'. And remember, this is the 'peak' of a rounded curve, not a triangle. So, we'll be on the 'peak' for awhile.

When the economies are going good, demand will be up, causing upward spikes in prices. The upward spike in oil can then cause economic downturns, which in turn bring down demand and prices fall.

From recent experience, we would seem to be able to add heavy pressures of speculation, like last year when money was fleeing the stock markets and looking for good investments, and flooded into oil for awhile increasing the existing upward spike.

Oil prices will tend to choke an ongoing recovery, but only after its gotten well started and the demand is increasing again. But they'll stay low(er) during our current downward economic death spiral/stall.

August 3, 2009 4:00 AM  
Blogger m said...

I absolute agree with the conclusion of the story, namely that at some time we will run out of oil. Further, that inefficiently used fossil fuels of all kinds needlessly contribute to all kinds of pollution. That fossil fuel use must be husbanded as best as optimally feasible. This needs to be done for many, many reasons besides the two I mentioned above.

But our fine editor, of a similar age to my own, must remember that the end of oil production has been predicted to be imminent with each of the oil crises. These predictions were made in the '70s, '80s, '90s and now again. Some of them replete with statistics as persuasive as those shown arguing for peak oil today.

Someday oil will run out. But, one of the benefits of age, counterbalancing some of the pain of physical detriments, is being able to remember the various memes that plagued the past. And to be a bit more skeptical of the immediacy of the ones that come round and round.

It is a sad commentary on the ill named Homo sapiens sapiens (man the wise the wise) that no matter what arguments are made, we seem to be unwilling to give up our wastrel behaviors in the use of fossil fuels.

August 3, 2009 9:23 AM  
Anonymous Mairead said...

One of the findings in social psych is that well-justified law changes beliefs as well as behavior. The mechanism is the resolution of cognitive dissonance.

So, given the will to pass laws limiting the use of fossil fuel, AND to make a strong case for the limitation, AND provide ways to compensate for the convenience losses, we could be out of the f-f pollution business in less than a generation.

The reality, of course, is that we'd bloody well better do it, and that right soon unless we want the onrushing climate disaster to bury us all (or actually not bury us...we'd just lie around and rot because the burial parties would be too busy trying not to join us)

August 3, 2009 12:13 PM  
Anonymous Anonymous said...

You don't need to pass laws limiting consumption of anything. What you need to do is encourage innovation. One of the reasons the liberals have failed as miserably as the neocons is that they have the same stupid mindset. THAT THEY KNOW EVERYTHING AND ALL THEY HAVE TO DO IS PASS A FEW THOUSAND MORE STUPID LAWS TO PROVE HOW MUCH THEY BELIEVE IN FREEDOM.

August 3, 2009 4:17 PM  
Anonymous Mairead said...

I think the difficulty with "encourage innovation" is that the system is set up to suppress that kind of innovation.

Just look at the "innovative" automobiles: still moving a tonne or more of metal and plastic to move a 100Kg payload. Barking nuts!

As long as people don't have their expectations recalibrated by law (public or physical), they won't be able to see anything wrong with the same old same-old. Culture is very compelling, and few people ever even have a reason to question its dictates, much less the ability to step back and analyse its shortcomings.

August 3, 2009 7:54 PM  
Anonymous let's have some more bought-and-paid-for laws with lots of last minute riders. said...

The law to save the planet will raise the price of gas to ten bucks per gallon and will drive the working family into the street while not doing shit to reduce emissions because the biggest sources of air pollution are (a) diesel trucks, (b) airplanes and(c) huge ships all of which are exempt from ANY standard of emissions. So lets put granny's clunker off the road or run it on corn while people starve because godforbid anyone should grow hemp without petroleum agribusiness method. When Jefferson said "That gov't governs best which governs least" what he should have said that the less laws we have, the fewer stupid laws we'll have.

August 3, 2009 8:44 PM  
Anonymous Anonymous said...

Steamships measure their fuel consumption in thousands of gallons per mile. Outlawing them would be a good start.

But even that doesn't really address the issue that petroleum is vital to the manufacture of all plastics. Too vital for us to be burning it all up. When we run out of gasoline, we may be able to use other forms of power to move around, but we're not going to magically acquire new materials to make plastic with.

August 4, 2009 3:52 PM  

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