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.
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).
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.
Richard Branson announced that Virgin Atlantic in partnership with Kiwi LanzaTech and Swedish Biofuels would be teaming up to produce jet fuel from recycling waste gas from industrial steel production. They estimate that the process could be applied to 65% of the worlds steel mills potentially saving/recycling a lot of carbon dioxide that otherwise would go straight into the atmosphere. There is still a long way to go however. A ‘demo’ flight with the new fuel is planned in 12-18 months and in the words of CEO of LanzaTech “While there is still work to be done and logistical hurdles to cross,” …. “we are confident that we will have a facility with the capacity to produce fuel for commercial use by 2014.”
Detailed analysis on this next generation technology suggests the fuel will produce around a 50% saving in lifecycle carbon emissions.
Virgin press release and Richard Branson’s Blog.
And I didn’t even notice the pun in the title until after. Maybe when I reach a pun per sentence I can call myself a journalist.
Aviation, Biofuels, Branson, Jet Fuel, Oil, Peak Oil, Virgin AtlanticTerry Karl, Gildred Professor of Latin American Studies and professor of Political Science at Stanford University, discusses overcoming the resource curse. Also known as the paradox of plenty it is the fact that most resource rich, in this case oil rich countries are performing far poorer than non resource rich countries in terms of development and governance indicators, defying logical economic thought. This is largely a phenomenon in countries which have poor governing systems and high incomes (from the oil) increasing the likelihood of corruption. These oil rents/income break the traditional relationship of governments and people with the tax, representation, accountability dynamic found in developed countries such as Europe and the US. When government coffers are not dependent on taxes and are almost exclusively dependent on secret transactions between oil companies and governments it leads to the continuation of this corruption cycle. Government leaders can spend this money however they like, building up military and buying off certain key sections of the population (religious, ethnic, regional groups, etc.) and keep control of government through more autocratic means. A story that exists in the majority of oil producing countries.
Terry argues that transparency in disclosing payments made from oil companies to countries is a key first step in breaking the cycle of secrecy which helps shape the current political situations of civil war and conflict in many of these oil producing countries. Without it, development and democracy will be permanently hindered. It also has large ramifications for the world as a whole. Reporting on oil production and reserves is highly dubious in terms of accuracy and the biggest, most profitable market in the world uses this extremely bad information to predict oil prices. This helps breed uncertainty, speculation and ultimately volatility in the marketplace which is bad for every consumer of oil but also completes a viscous circle with oil producing countries as their incomes yoyo up and down, causing any budget planning to go out the window. This also helps breed mistrust between the various parties, particularly with the left out sections of the population of the oil producing countries, increasing likelihood of conflict, interruptions in oil production and further market volatility. The resource curse affects us all.
