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.
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.
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.
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.
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.
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.
I finished reading Paul Gilding’s book The Great Disruption earlier today and I believe it is the most important book I have read since Tim Flannery’s The Weather Makers and would heartily recommend both. In the absence of the book I have found a video of a 30 min talk Paul gave to the World Affairs Council (with another 35 mins of Q&A). Or you can view the abridged 16 min version at the bottom.
The main ideas of the book are that the environmental movement has failed to cause a cultural change that will enable us to take pre-emptive action and avoid the serious impacts of climate change and resource depletion. Despite decades of effort, the world is still in denial. But when looking at human psychology and serious world events this is not actually surprising. As Paul argues – we are slow, but not stupid. The obvious prior example is World War II. Hitler and the stirring of Germany was not a new idea when war was declared in 1939. Prior to that there was much denial about the real threat of Germany, most notably the political policy of appeasement. But once war was declared things changed remarkably quickly and policies and achievements that seemed impossible before all of a sudden happened. Paul believes we are in much the same situation and it will take a great deal of climate pain for the world to wake up from its state of denial. Once this happens the world will go to war decarbonising our economies and it will happen at a pace that seems incomprehensible now. Paul argues that this will happen because there is no other choice. This is the key problem now, there is a choice.
But the story doesn’t end there. Paul argues that the climate problem is not the base problem, but the symptom of a much larger issue – the worldwide pursuit of endless economic growth on a finite planet. The economic model on which we base our societies is flawed and at some point needs to change to a steady state economy. Again this is not a new idea, it was acknowledged my many of the fathers of economics. But listening to politicians of today, the mantra of growth is so firmly embedded in our attitudes that it will take many years of failed growth for the idea that we have reached our planetary limits to sink in. While the transition will likely be unpleasant, the destination of an economy that has limits on the resources it uses and the pollution it produces is a positive one. It will mean a redistribution of wealth and a more equitable society. Despite the commonly held view that more money equals happiness (true only if it pulls you out of poverty), research shows that more equitable societies are much healthier societies. It could mean that advances in productivity translates into less time working.
One can argue that the book has a slightly optimistic outcome, one where we are successful in meeting the climate challenge. We could fail, just a few different decisions taken in WWII might of resulted in the citizens of the UK saluting the Fatherland. It does gloss over the difficulties to come. But (again as Paul touches on) if we are to be successful in meeting the upcoming challenges we will have to be outwardly positive and optimistic even if we sometimes inwardly doubt ourselves. It is equally incorrect to assume that society will just collapse without a fight and we are often pessimistic of what we can achieve when we really put our minds to it.
Where the truth lies I don’t know, but this book has articulated many of the feelings I have on where the world is at. You can argue about the details but the underlying ideas in the book are spot on. It is an important book as it has helped me come to the realisation that those of us not in denial need to spend less time fighting those that are (as the evidence will become overwhelming) and more time preparing for the great disruption.
I urge you to buy the book The Great Disruption. The link goes to amazon so you have the most amount of reviews to read, but please try and buy from your local bookstore (unless you have a kindle/ipad).
China, Climate Change, Climate Destabilisation, Climate Science, Economics, Economy, environment, fossil fuel, GDP, Global Warming, Growth, Paul Gilding, population, Renewables, sustainability, VideoFor more info on the event, including slides on the presentations at csis.org
Clean Energy, Economics, Economy, Geopolitics, RenewablesBefore the financial crisis I never really understood what all the business bits in the news really meant, the whole economy was a bit of a mystery. Since then I have learnt a few things, one of which is that money is largely an illusion. As an individual it is very real, how much I have will determine much of how I live my life. But on a societal/global level it is simply a way in which we humans organise ourselves and the economic system is just a loose rulebook on the distribution of materials and labour. As much as we think the rulebook is based on rules that are fixed like the laws of nature, it can in fact be changed at any time, you just need the political will to do so.
Which is why it is encouraging to see the whole Occupy Wall Street movement spread throughout the world. As this great Business Insider chart article shows the economic system is well and truly broken. I have said for a long time that the 2008 financial crisis wasn’t a crisis enough. Maybe I was wrong.
If economic growth is the main driver in human behaviour (on a governmental level) and this apparently is for the good of the people and the future why is this link now broken?
The current system is now supporting the rich at the expense of the 99%. Also the levels of debt will not be able to be paid of for decades. The way in which we extract our energy and extract resources to feed this economy is slowly poisoning or eroding the natural capital base on which we are all dependent. Our desire for babies and our belief in family values has caused a boom in consumption, indirectly harming others. The notion of “love miles” – jumping on a plane to see our loved ones – is also doing the same thing. And once again, the bottom 99% are going to be most affected by all of this. Just what is the system designed for?
One of the problems is that we have all grown up thinking our actions are inherently “good”. It has been a long time since we as a society have looked in the mirror and questioned this.
If this video of Dylan Ratigan doesn’t stir the blood and get you thinking I don’t know what will. Just as the political process has slowly been corrupted, so too have our values as a society.
