Thursday, 16 June 2011

Peak Oil

On New Year's Eve 1999 I found myself on a beach with a lot of strangers, drinking booze around a campfire and setting off fireworks to celebrate midnight, a new millenia.

Strangely I found myself so distracted by thoughts about oil that I couldn't really enjoy the celebration. I'd never thought about oil previously, I'd just accepted that it was a finite resource and would eventually be used up, which would doubtless cause a lot of problems. But I'd never really thought about it.

The following Summer, of course, the UK was gripped with 'Oil Strikes' - protests about the price of oil. The protests (by hauliers and farmers) prevented petrol deliveries, cutting supply to levels which reduced traffic so much that on some days it was eerily silent in the normally busy Welsh capital Cardiff, where I worked at the time. Even though it was a real surprising pleasure to be rid of all that noise and congestion, I nevertheless felt it was a very ominous and foreboding silence. That made a big psychological impact on me following so soon after my New Year's Eve experience, which itself was quite weird.

The following Summer was 911, the Summer after that we had the oil drums...errr.... war-drums beating to attack Iraq. The following Spring saw the atrocity of the invasion of Iraq. [btw who ever asked how many casualties the Iraqi army suffered?]

By the end of the decade we had an international financial crisis of seemingly unprecedented scale.

And now, over a decade since my New Year's Eve concern, I'm perhaps seeing peak oil moving increasingly onto the agenda.

The Guardian has an article on it here. They report that:
The government was warned by its own civil servants two years ago that there could be "significant negative economic consequences" to the UK posed by near-term "peak oil" energy shortages.

Ministers were told it was impossible to know exactly when production might fail to meet supply but when it did there could be global consequences, including "civil unrest".

Yet ministers consistently played down the threat with the contemporaneous Wicks review into energy security (PDF) effectively dismissing peak oil as alarmist and irrelevant.

The report on the risks and impacts of a potential future decline in oil production has just been published – but only after the Department of Energy and Climate Change (Decc) was repeatedly threatened under the Freedom of Information (FoI) Act with forced disclosure.
The Government report can be found here. I haven't read it yet.

It appears that companies such as Virgin, StageCoach and some others are part of a pressure-group working to bring issues of peak oil into public policy and debate.
So that's certainly an improvement, it's gaining traction.
I fear it is all happening a bit slowly though. Far too slowly. As always, the people at the bottom feel it first, and hardest. Fuel prices are rising at rates way above an inflation rate which is generally high, and even amidst a recession the oil-price per-barrel is consistently running at historic highs. Turmoil throughout MidEast doesn't help either.

What happens if there's strong growth in the major economies? At some pricepoint there can't be any growth, it will be choked-off. So how elastic is the supply? We might be at the all-time maximum output right now - which means dwindling supplies will shortly be pushing up the price anyway, let alone considering rising demand.
It's a really awful scenario.
And I can't help thinking all these things are related. We also have the BP fiasco and the Fukushima nuclear plant. UK is again a net importer of oil, having spent the last 20 years as a net exporter, thanks to N Sea. All signs of the times?

We're doomed I tell ya. :D

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