The Peakist

Seven international parties involved in an experimental nuclear fusion reactor project have initialled a 10bn-euro (£682m) agreement on the plan.

The International Thermonuclear Experimental Reactor (Iter) will be the most expensive joint scientific project after the International Space Station.

Wednesday’s agreement in Brussels gives the go-ahead for practical work on the project to start.

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· Report urges poor nations to switch to clean energy
· Higher oil prices could reverse years of progress

Developing countries must wean themselves off oil and fossil fuels and turn as quickly as possible to solar, wind and water power if they are to avoid disastrous climate change effects and continue to develop, says Christian Aid in a report. (more…)

Oil ShockWave is a scenario exercise developed by Securing America’s Future Energy (SAFE) and the National Commission on Energy Policy. In this half-day exercise, top former government officials take part in a series of Principals meetings of the Cabinet over a seven-month period in order to advise the President on how to respond to a series of events that affect world oil supplies.

In 2005 a simulation was run where 3.5 million barrels of oil were suddenly removed from a global market of more than 83 million barrels. The simulation showed the US losing 2m jobs, the largest drop since 1945. (more…)

Will Hutton recently wrote an insightful piece in the Observer (April 30, 2006) discussing the geopolitical realities of a world facing peak oil. Contrary to our stereotype of the US as wedded to laissez faire capitalism he made the that point that:

“The US, after all, has no commitment whatsoever to the idea that states and peoples must supinely accept market verdicts. Markets, it is well understood, are shaped by human hand…Britain in all this is the doe-eyed Bambi, bleating its faith in market forces in a world of predators.”

And suggested as a antional stategy:

“We should urgently slow down the depletion rate of North Sea oil and gas and establish a British strategic reserve and, with that protection, begin determinedly to build an economy that is not dependent on oil and gas.” (more…)

In the United States, high gas prices and mammoth oil company profits have set off a new round of hand wringing in Washington. Foreign Policy interviewed energy analyst Amy Myers Jaffe of Rice University’s Baker Institute of Public Policy on America’s energy predicament.
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· Petrodollars give Putin weight on world stage
· America is ‘nervous and angry’, say observers
In the Kremlin on Thursday a little-known but powerful Russian official held court for the first time before foreign journalists with a very simple message: Russia is great and getting greater by the week. Sergei Sobyanin, a former governor of the oil-rich region of Tyumen, chief of staff to President Vladimir Putin, and one of the mightiest men in Russia, was enlarging on his leader’s state-of-the-nation speech 24 hours earlier in which Mr Putin identified the key to Russia’s progress in both human and military regeneration. (more…)

European energy consumers face further big rises in gas prices in the coming years because of acute shortages of Russian supplies and growing tensions between the Kremlin and EU, senior economists and a former Russian premier said Wednesday.
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NEW DELHI: India and China have come together once again to jointly bid for a stake in an oil venture in faraway Colombia for some $800 million.

ONGC Videsh Ltd (OVL), the overseas arm of state-run Oil and Natural Gas Corp, and China Petroleum and Chemical Corp (Sinopec) have jointly submitted a bid to acquire stake in the Ominex de Colombia - a subsidiary of the Texas-based Ominex Resources Inc.
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As Evelyn Pringle reports in Countercurrents today, whilst high oil prices are producing record profits for the oil companies, the wider US economy is struggling under the burden of higher fuel prices.

“The higher oil prices are a threat to America’s overall economy and the skyrocketing costs of heating public facilities and keeping school buses, police cars, emergency vehicles and snowplows running are wreaking havoc on local governments all across the country.” (more…)

Christopher Dickey, Newsweek’s Middle East editor, argued this week in Foreign Policy that Iran’s defiance of international pressure over its development of nuclear technology is enabled by the ‘oil shield’ - the world cannot countenace an attack on Iran that would spike oil prices to damaging levels -but that Iran’s rush towards nuclear technology is predicated on the knowledge that the ‘oil shield’ is temporary. Current Saudi investment will, it is argued, increase oil supply by 2012 such that it can once again ‘turn on the taps’ to mitigate the oil price spikes.

It is notable that Dickey makes the common place mistake of making a strategic calculation that completely ignores peak oil:

“In 2005, the Saudis launched a $50 billion program to reassert their power in the markets. By the summer of 2009, they expect to increase their overall production capacity from 11 million barrels a day to 12.5 million barrels, which should restore their ability to keep about 3 million barrels in reserve. When that happens, world oil markets will be much less vulnerable to a drop in Iranian oil exports; Iran will be much more vulnerable to international pressure. ”

There is a good argument that the current supply crunch has been caused by under-investment and the increase in OPEC output quotas in 1997. Prices fell to $10 a barrel in 1999 in October 2000 Shell’s long-term forecast was for $14 a barrel; investment decisions were made on this basis. With current prices, and Chavez calling on OPEC to maintain a $50 a barrel price whatever happens in the future, known but unexploited reserves and expensive exploration are viable.

But to support Dickey’s thesis we need to make several assumptions: the first is the usual oil industry smokescreen, that demand in 2012 will be at the same level as it is now - absent a global recession, this is untenable; secondly that Saudi Arabia has not and will not hit peak by 2012, contra Simmons; thirdly, that whether or not there is a Saudi peak we have not and will not hit global peak by 2012. We might add of course, whether Arabia is still Saudi.

The real questions for Iran’s strategic calculations therefore might be - how likely is a global recession? how stable is Saudi Arabia? And of course these two questions are inextricably linked. (more…)

Last November a conference was held in Rimini, Italy called “The Soul of Empire - the troubled horizons of oil - sustainability or apocalypse soon?” . The conference was a high level event, with presentations from the EU, the UN, the International Energy Agency and the Gorbachev Foundation amongst others.

The conference theme began…

“Three decisive challenges for planet Earth loom on the horizon and
condition the prospective paths of world development: satisfying the
world’s need for energy which is cheap and cleaner in its processes, products and systems of use; secondly, accelerated economic growth on the part of the economically less developed countries within a framework of democratic freedoms and the self-determination of peoples; thirdly, environmental sustainability as an eco-efficiency value of nation systems. Oil is not only a resource but a political and economic instrument that is in effect the Soul of the Empire, conditioning geopolitical choices, determining equilibria and generating conflicts. It will continue to be the critical factor in international relations: if in the next decade world production of crude oil should reach its peak, industrial development would face serious challenges.” full text

All shades of opinion were represented, from Daniel Yergin, CEO of CERA (the market leading oil industry research company) who sees no problem with ‘business as usual,’ to Colin Campbell, founder of the Association for the Study of Peak Oil. But perhaps the most significant contribution, was the peakist postion taken by James Schlesinger, ex-CIA head and secretary of defence during the OPEC oil embargo of 1973. (more…)

by PATRICK MOORE

In the early 1970s when I helped found Greenpeace, I believed that nuclear energy was synonymous with nuclear holocaust, as did most of my compatriots. That’s the conviction that inspired Greenpeace’s first voyage up the spectacular rocky Northwest coast to protest the testing of U.S. hydrogen bombs in Alaska’s Aleutian Islands.
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by Michelle Boyd

Global warming is an undeniable and urgent problem, and support for taking federal action is increasing. Now, a debate is raging about the proper course of action; what will produce the greatest gains in the shortest time?
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Alternatives unlikely to meet demand for large-scale power
By Andrzej Zwaniecki, Washington File Staff Writer

Washington — Nuclear energy is the best option for large-scale power generation that does not add to emissions associated with global warming, according to U.S. officials, industry representatives and an increasing number of foreign governments and international groups.
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Bolivia’s President Evo Morales has signed a decree placing his country’s energy industry under state control.

In a May Day speech, he said foreign energy firms must agree to channel all their sales through the Bolivian state, or else leave the country.

He set the firms a six-month deadline, but the military and state energy officials have already started taking control of the oil fields.

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