LINK
Motorists, truckers and farmers protest as global oil stocks dwindle and Third World industrialization sends demand soaring. The need for further development of conservation measures and alternative energy is urgent.
Gwynne Dyer Vancouver Sun
A barrel of crude oil still costs less than a barrel of Coke or a barrel of Perrier water, as the website of the Organization of Petroleum Exporting Countries (OPEC) helpfully points out.
For all the screams of anguish about the recent steep rise in price, oil is actually selling at the moment for around its average price over the past 30 years. But the next 30 years are going to be very different, because we will soon be running out of the stuff.
Three years ago, geologist Craig Bond Hatfield of the University of Toledo calculated that even if global oil consumption remained steady, worldwide oil production would go into absolute decline by 2036. But it isn't remaining steady; it's going up each year, so the deadline is a lot closer than that.
There has been some progress in the West in economizing on the use of oil, mainly because the "new economy" gets a lot of its growth in areas that don't use large amounts of energy. American economist Paul Krugman estimates that the U.S. burns only half as much oil per dollar of gross domestic product as it did in the early 1970s. But Western oil consumption hasn't actually fallen, and elsewhere it's soaring.
The surge of economic growth in industrializing Third World countries means that global oil consumption has risen from 59.7 million barrels a day in 1985 to 69 million b/d in 1995, and 75 million b/d this year. When you factor in this continuing growth in consumption, according to Hatfield, the date when total world production peaks moves up to 2011.
No doubt there is more oil still to be discovered, but the trendline is undeniable. Since 1985, each year's newly discovered oil reserves have amounted to only about 40 per cent of that year's global oil consumption. By now it's down to 25 per cent.
Even the conservative International Energy Agency agrees with Hatfield's figures, estimating that somewhere between 2009 and 2012 global oil production, after rising steadily for 140 years, will peak and start down again. By 2020, about one-fifth of the predicted consumption will have to come from "unidentified unconventional" sources (i.e. they have no idea where it's coming from). By 2040, according to other studies, total global oil production may be down to less than half what it is now.
What will this do to the global industrial economy that we have built largely on oil over the past century and a half? Well, if we don't have time to develop and put into place alternatives sources of energy to carry the load that is now borne by oil, it will simply crash in ruins.
Alternative energy sources can be developed. We even have a good idea what sorts of technologies would be involved, from solar power to fuel cells. But we will need a very long time to shift an entire world's industrial plant and transportation system over from oil.
So if we are not to have the Crash of all time in 10 or 15 years, two things must start happening soon: serious oil conservation measures, to give us more time for the transition, and a big push to get the alternative technologies out of the labs and on to the streets.
In a market-driven economy, that means the price of oil needs to go up, and stay up. No more wild fluctuations between $8 and $35 a barrel within an 18-month period; just a steady rise towards, say $40 a barrel by late next year, and then further gradual rises towards about $60 per barrel by 2005. Is this break with the traditional pattern possible?
Yes, because power is moving back towards OPEC, whose long-term interest is in sustainable higher prices.
What has driven the huge gyrations of oil prices over the past three decades has been the fact that whenever OPEC's deliberate strategy or incidents like the Iranian revolution or the Gulf War drove them up, the industrialized countries would invest more in their own (higher-cost) oilfields. Increased non-OPEC production, together with a recession caused by the high oil prices, would then cause a world glut of oil and bring prices back down.
But there are no more North Seas and Alaskan North Slopes waiting to be developed. The West can pull off this trick at most once more -- and maybe not at all.
OPEC's share of the world's remaining proven reserves has gone up from 67 per cent to 78 per cent in the past 10 years. Moreover, even within OPEC, power is shifting toward the big Middle Eastern oil producers with relatively small populations. At the moment, OPEC as a whole supplies 41 per cent of the world's oil. By 2010, its Middle Eastern members alone will account for half the world's production.
Unlike OPEC members like Venezuela, Nigeria and Indonesia, who need every dollar they can squeeze out right away, the cartel's Middle Eastern members (with the exception of Iran) are countries that can afford to restrict production in the short term in order to push prices up. It's wonderful when the world's long-term best interest coincides with your own self-interest, so they probably will.
And will these higher prices slow down the growth of the world's industrial economies? Of course they will -- but it's generally a good idea to slow down when you're driving straight towards the edge of a cliff.
Gwynne Dyer Canadian journalist on international affairs based in London
-- homo-extinctus (homo-extinctus@xox.xox), September 26, 2000
By-products of oil:
"It is important to note that the end product of many alternative
energy sources such as nuclear, hydro-electric power, wind, solar,
geothermal, and tides is electricity, which is not a replacement for
oil and natural gas in their important roles as raw material for a
host of products ranging from paints and plastics, to medicines, and
inks. But probably the most vital of all uses is to make the
chemicals which are the basis for modern agriculture.." Walter
Youngquist, Consulting Geologist http://www.ecotopia.com/apollo
2/
"Most people have no idea of the tremendous number of common items
produced from crude oil. Many people associate gasoline or diesel
fuel with crude oil, but not the huge number of products that are
used everyday. The items produced from crude oil are astounding and
number in the thousands. Scientists have identified at least 500,000
different uses of oil." Examples:
Saccharine, artificial sweetener) roofing paper aspirin hair coloring
heart valves crayons parachutes telephones bras transparent tape
antiseptics purses deodorant panty hose air conditioners shower
curtains shoes volleyballs electrician's tape floor wax lipstick
sweaters running shoes bubble gum car bodies tires house paint hair
dryers guitar strings pens ammonia eyeglasses contacts life jackets
insect repellent fertilizers hair coloring movie film ice chests
loudspeakers basketballs footballs combs/brushes linoleum fishing
rods rubber boots water pipes vitamin capsules motorcycle helmets
fishing lures petroleum jelly lip balm antihistamines golf balls dice
insulation glycerin typewriter/computer ribbons trash bags rubber
cement cold cream umbrellas ink of all types wax paper paint brushes
hearing aids compact discs mops bandages artificial turf cameras glue
shoe polish caulking tape recorders stereos plywood adhesives TV
cabinets toilet seats car batteries candles refrigerator seals carpet
cortisone vaporizers solvents nail polish denture adhesives balloons
boats dresses shirts (non-cotton) perfumes toothpaste roller-skate
wheels plastic forks tennis rackets hair curlers plastic cups
electric blankets oil filters floor wax ping pong paddles cassette
tapes dishwashing liquid water skis upholstery chewing gum thermos
bottles plastic chairs transparencies plastic wrap rubber bands
computers gasoline diesel fuel kerosene heating oil asphalt motor oil
jet fuel marine diesel butane " Dr. Gary L. Stringer Northeast
Louisiana University http:/
/etrc33.usl.edu/etrc/projects/osage/acts/made.html
Maguire Energy Institute lists products made from oil, at:
http://www.c
ox.smu.edu/maguire/learning/LCCh1.html
The chemical industry relies on the petroleum industry for over 90%
of the source material for the thousands of chemicals it produces: http://www.mine
ralswa.asn.au/~cmepet/page8.html
-- homo-extinctus (homo-extinctus@xox.xox), September 26, 2000.
Technofixers fix this:
People aren't orderly; they will become less orderly as they realize
gasoline and hamburgers are going to be harder and harder to get.
On the face of it, it appears we have got ourselves in a fine mess
this time! May I suggest orderly is better, and we that don't put
too much faith in undiscovered panaceas. Moderation in all things..
It may be that parts of the world will suffer anarchy as the shift to
renewables becomes more needful, particularly as the poor nations are
unable to supply sufficient energy minimums per capita. It is my
feeling that we can make the shift with more facility as long as
mobility of transport is maintained. In the USA, cross Continent
freight can get back onto the rail mode, as President Lincoln had in
mind in 1862. Likewise wherever efficient rail corridor exists; put
it back to work.
The fact that standard railway mode is near worldwide, and that it is
energy efficient and can use almost any energy source, suggests
transition policies must include expansion and enhancement of rail
corridor and interface with other modes.
There is a book discussing the railway in crisis and disaster that
might be useful to concerned planners. "RAIL TRANSPORT AND THE
WINNING OF WARS" by James A, Van Fleet, Association of American
Railroads, 1959. The fallback to a bicycle only economy might be
put off indefinitely if renewable power dedicated to strategic rail
corridors was part of national/regional policy.
An interesting test case might be applying the renewable electricity
to wires to wheels concept to the Palestinian tragedy in the Middle
East. To allow Israel defensible borders, it might be workable to
create a series of population nodes along a new electric railway
corridor linking Cairo, Jerusalem, Medina and Mecca. Traffic
volume to the holy sites would justify the railway from a strict
business venture viewpoint. Ulterior motive, of course, will be
to forestall nuclear war and put into being a microcosm of a
renewables oriented economic society.
Gunnar Henrioulle, Associate, Tahoe Valley Lines,
-- Gunnar Henrioulle (gunnarh@cwo.com), April 05, 2002.
