This particular chapter takes a more detailed look at the various oil demand projections by comparing each organisation’s take on the main economic forces that shape their final numbers. Despite the huge uncertainty, there is near universal agreement on some of these forces. But opinion is divided on the biggest question of all – will supply be able to meet demand.
Posts tagged "Oil"
Peak Oil Files – 4 – Future Demand
This chapter looks at the recent history of the many organisations that make energy demand forecasts. Their track record has a lot to be desired but understanding the huge uncertainties involved highlights just how easy they are to get wrong.
Peak Oil Files – 3 – In High Demand
This chapter attempts to cover the last 150 years of oil consumption with the aim of discovering the main economic forces that have helped shape how and where oil is used today. By understanding these forces we can begin to understand how future oil demand will unfold.
Peak Oil Files – 2 – Energy Security
This chapter attempts to explain why oil depletion is not simply a problem of “will we run out” but rather a more complicated supply and demand problem concerning energy security. The size of the tap is more important than the size of the tank.
Peak Oil Files – 1 – The Importance of Oil
This is the first chapter in an in depth, multi part, info-graphic based series that attempts to explain all the ins and outs of peak oil, why it is inevitable and what is likely to happen in the coming years. It is intended to be much like a book with separate, complimentary chapters that help properly educate people on all the ideas and issues surrounding the topic so that whoever watches will have a good enough understanding to be able to make some sensible decisions/comments. The emphasis is on “properly educate”, I want to help create a definitive guide that people can turn to when they want to learn about this incredibly important issue.
This particular chapter attempts to explain why oil is the lifeblood of today’s modern economy and how any major fluctuations in oil price can expose the many inherent weaknesses in this globalised system that feeds, clothes and houses us.
World Oil Supply Debate – ASPO & John Hofmeister
An excellent debate between Dr. Tadeus Patzek (Chair, Petroleum and Geosystems Engineering, University of Texas – Austin, ASPO USA Vice President) & John Hofmeister (Ex CEO of Shell, Founder of Citizens for Affordable Energy) covering the topic “The World Oil Supply: Looming Crisis or New Abundance?”.
Despite the debate there was much agreed upon, largely that global trends, such as growth in demand from China and India, will force oil prices upwards and that current US energy policy is inadequate in addressing this problem (but agreeing on the what the future policy should be is another story).
Jeffrey Rubin On Why High Oil Prices Stop Growth
This almost 30 minute interview from In Conversation with Allan Gregg economist Jeffery Rubin talks about his book “The End of Growth”. His basic thesis is that high oil prices (100+ a barrel) will cause economic growth in the developed world to flat line (while China and India will slow to 4-5%) and the world is stuck with high oil prices because the marginal barrels being produced from the Canadian oil sands and the US light tight oil need these high oil prices. Basically it’s a catch 22 situation, to have traditional economic growth rates you need enough cheap oil, but to have enough oil we need to develop expensive sources and for that we need to have high oil prices. It’s basically a continuation of the energy return on energy invested (EROEI) argument.
But Jeff argues that this situation will have many silver linings. The higher transport costs will reverse the trend of globalisation and make local industry more competitive. It will also force us to have better urban planning and higher population densities that is a characteristic of the more livable world cities. The demise of the suburbs and high food prices will provide an economic incentive to turn much of this prime agricultural land back to the purpose they were originally used for – farming.
US Energy Security Council Inaugural Event 2011
This 105 minute informal talk with a panel of about 10 members of the US Energy Security Council which includes many former heads of the military, US Senate, oil industry and governmental bodies most of which have “honorable” before their names (Ex CIA Boss James Woolsey, Senator and Professor Gary Hart and Alan Greenspan to name a few).
While this is not a new subject, this event attempted to frame the debate as there being a monopoly in one of the most profoundly important sectors in our economy and that monopoly is a great weakness which leave us all exposed if we do not do something about it. I am of course talking about oil being the only real source of energy for all the cars, trucks and airplanes currently operating in the world today. This council argues that the principle role of government is to create markets and have them work. A monopoly is an example of a market not working. In this regard they argue that they are not being anti-oil but rather pro choice or pro fuel choices.
The decades of inaction on developing a proper energy policy has meant that the US has developed one by default. That is: “We do have an energy policy. We rely on a single fuel. We buy it from a cartel controlled by people who don’t like us very much. And every five years we go to war to maintain that privilege”. The council members are deeply worried about the effects that an inevitable oil price shock will have on the US economy and the people within it as history has shown these price spikes help trigger recessions (I will assume they are also concerned about the rest of the world but as they are talking to an American audience we’ll let it slide).
Talk covers a range of issues, such as:
- How there are many hidden costs to oil – the War on Terror, 30-40% of the US military budget directly and indirectly securing oil, climate change, social tension when oil prices rise, etc.
- Another supply shock is on the cards. As most of the oil reserves are located in the MENA (Middle East and North Africa) region where there is great political instability, especially after the Arab Spring. How long will it be until the next Libya occurs? There have already been attacks on oil infrastructure in Saudi Arabia, when will there be a successful one?
- Rise of developing nations. China is securing first rights to purchasing oil around the world meaning when a supply shock comes they will be more insulated and the world market will be that much tighter.
- Alternative fuels. There were a few on the panel gunning for methanol though some of their arguments sounded a little too good to be true for me. While it theoretically makes a lot of sense the actual practical and economic reality is less clear.
Perhaps the most important point is that all cars built today should be flex fuel vehicles. It only costs $100 to add in a sensor chip that detects the fuel on board and makes small changes to the fuel injection and spark plug timing to enable the engine to burn whatever mixture of ethanol or petrol/gasoline is in the tank. $100 buys flexibility for the fleet of the future and may in the long run save us billions, potentially trillions of dollars. This has happened successfully in Brazil and should be an easy mandate to pass by governments in the rest of the world. Key word should.
The same goes for developing a sensible policy on energy.
Biofuels, Conventional oil, Crude Oil, fossil fuel, Gasoline, Geo-politics, Oil, Transport, United States, VideoHow an Oil Well is Drilled
A simple little 6 min computer animation that shows the start to finish steps of how an oil well is brought into production.
http://www.youtube.com/watch?v=DniNIvE69SE
Conventional oil, Crude Oil, fossil fuel, Oil, Oil Production, VideoCSIS – IEA Medium Term Oil & Gas Market
I would of liked to be able to post the 2011 version of this up but every version of CSIS.org recording of the event (youtube, www.csis.org, itunes) seems to end after 7 mins. Still the 2010 version is quite similar and should give you a decent summary of the shorter term issues and what is in the pipeline for oil and gas at the moment.
Check out the csis.org page on the event for the slides that accompany the presentations.
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