The Peakist

Building programme is response to Russian move
UN to decide on seabed claims to huge oil deposits

Ewen MacAskill in Washington
Saturday August 11, 2007
The Guardian

Lancaster Sound, Nunavut, Canada. Global warming has made the Arctic’s oil and gas reserves more accessible Photograph: Louise Murray/Science Photo Library
  An international scramble for the Arctic’s oil and gas resources accelerated yesterday when Canada responded to Russia’s recent sovereignty claims with a plan to build two military bases in the region. (more…)

By Javier Blas in London

Published: August 10 2007 12:27 | Last updated: August 10 2007 12:27

Opec needs to increase its production in the short term as world oil supply is lagging demand, the industrialised countries’ energy watchdog warned on Friday. (more…)

A recent article in New Scientist explored the emergence of biomass-based replacements for petro-chemicals. Their economic viability and the economic motivation to produce them is another effect of consistently high oil prices. The article is perhaps over-optimistic that the petro-chemical industry could be replaced any time soon by biomass-based chemicals, and does not examine the knock-on effects of using corn, sugar-beet and other foodstuffs as feedstock for chemical production, which of course we’re already seeing in world food prices due to biofuels. (more…)

By David Strahan, The Independent on Sunday, 15 July 2007.

BP and Shell are finally about to merge. That’s if you believe the tittle-tattle in the Square Mile. Of course rumours that the two giant companies might wed are hardly new and have been the stuff of bankers’ fevered imagination for years. But there is now an increasingly compelling case why the two energy groups should be integrated. At 4.5 million barrels per day, the oil output of a combined Shell-BP would dwarf that of American behemoth Exxon-Mobil and even major oil-producing countries such as Iran. Some analysts make a positive case for such a merger on the basis of massive economies of scale, claiming it it could save $5bn. But when it happens the real motivation will be far darker: desperation. (more…)

June saw the launch of the All Party Parliamentary Group on Peak Oil and Gas (APPGOPO).
All Party Parliamentary Groups are composed of politicians from all political parties and have members from the House of Commons and the House of Lords.  APPGOPO will enable interested MPs and Lords to discuss Peak Oil and all its surrounding issues. The APPGOPO has the support of over twenty MPs and Lords.  This actually makes it the largest political grouping looking at Peak Oil in the world. (more…)

David Strahan, author of The Last Oil Shock writing for Prospect magazine.
The Stern review on the economics of climate change was published to almost universal acclaim, and six months on, only a handful of economists have found anything to criticise. In one sense, Stern’s conclusions were entirely predictable. Now that climate change so clearly has a pistol at the head of our species, there could only be one response, irrespective of cost. But there was also a surprise: paying off the highwayman of climate change would not be extortionate. In fact, it would be an absolute steal. Stern concluded that if we do nothing, the effects of climate change could shrivel the global economy by as much as 20 per cent over the next two centuries. Avoiding that risk would cost only about 1 per cent of world GDP to 2050.

Some economists charged Stern with minimising the costs of mitigating climate change and exaggerating the threats. Since climate change is already stirring positive feedback loops that could spark runaway global warming of the kind that caused the Permian mass extinction 250m years ago—the one that wiped out 95 per cent of species on the planet—these critics are as wrong as only economists can be. But that doesn’t make Stern right. His review is indeed based upon a mistaken assumption—but one which means our situation is even more dangerous than his analysis allows. (more…)

That’s a pretty stark warning from the IEA. And begs the question whether OPEC can increase production by 4.9 million barrels over the next five years. There’s supposedly
3.5-4 mbd spare capacity in Gawar, but as posted in February, a Saudi Aramco spokesman admitted last year that its mature fields are now declining at a rate of 8 percent
per year,a decline 50% of production in about 9 years time. This all puts enormous significance on the un-exploited Iraqi reserves. This again makes me ponder the question upon which, without exageration, the future of mankind depends - will the oil supply crunch have a positive effect of constraining global carbon emissions? Potentially, high oil costs put a brake on economic growth and encourage energy efficiency gains while high energy costs more generally make renewables economic. Two key factors working against this are of course that the high cost of conventional oil makes economic the production of carbon intensive unconvential oil (whether tar sands or coal liquefaction) and bio-deisel (which, unless there is substantial control on the use of palm oil and soya as feedstocks will lead to a huge increase in rain forest destruction in S.E Asia and South America Respectively). Would the reduced emissions resulting from decreased consumption be out weighed by the consequence of economic stagnation - namely, a failure to invest in low carbon technologies? I’m reminded that the only Kyoto signatories that “achieved” substantail cuts in carbon emissions was Russia during the collapse of its industiral base.

These issue make two campaigns all the more important : (more…)

By Javier Blas, Financial Times, Published: July 9 2007

The world is facing an oil supply “crunch” within five years that will force up prices to record levels and increase the west’s dependence on oil cartel Opec, the industrialised countries’ energy watchdog has warned. (more…)

The Pentagon vs Peak Oil By Michael T. Klare

Sixteen gallons of oil. That’s how much the average American soldier in Iraq and Afghanistan consumes on a daily basis — either directly, through the use of Humvees, tanks, trucks, and helicopters, or indirectly, by calling in air strikes. Multiply this figure by 162,000 soldiers in Iraq, 24,000 in Afghanistan, and 30,000 in the surrounding region (including sailors aboard U.S. warships in the Persian Gulf) and you arrive at approximately 3.5 million gallons of oil: the daily petroleum tab for U.S. combat operations in the Middle East war zone. (more…)

Venezuela’s decision to sell petrol to Iran to alleviate its ally’s crippling fuel shortage reminds us that future supplies of fuel may not follow market economics but geopolitical fault lines. President Hugo Chávez made the promise during a visit to Tehran where he pledged an “axis of unity” with President Mahmoud Ahmadinejad. “The two countries will, united, defeat the imperialism of North America,” he told reporters. With a smile he added: “When I come to Iran, Washington gets upset.”

Closer to home the 2007 Economic Report of industry organisation Oil & Gas UK published yesterday warned that government targets of keeping Britain’s oil and gas production at 3m barrels a day by 2010 look like being missed.

Two thirds of university and college applicants between 17-21 believe that global oil reserves will have run out in the next 25 years, while 91% thought that climate change would be “hitting the world hard” according to a survey conducted by sustainable development charity Forum for the Future. Three quarters thought that lifestyles needed to change radically if civilisation was to survive the next century.

“It is already the world’s biggest country, spanning 11 time zones and stretching from Europe to the far east. But yesterday Russia signalled its intention to get even bigger by announcing an audacious plan to annex a vast 460,000 square mile chunk of the frozen and ice-encrusted Arctic…” writes Luke Harding in in the Guardian (more…)

David Strahan, author of The Last Oil Shock, argued that peak oil was the motivation for the invasion of Iraq in Guardian last week:

In a world of looming fuel shortage, Britain and the US formalised their energy fears with a war… (more…)

Crude impact, which Chris Vernon of the Oil Drum blog has called “the best documentary I have seen on the subject” is available on YouTube.

The Independent again showed the lead with peak oil last week with a front page response to the publication of BP’s Statistical Review of World Energy from Oil Depletion Analysis Centre (ODAC). ODAC’s response also got inside cover column inches in the Telegraph. BP’s Statistical Review comes hot on the heals on OPEC’s threat that it was considering cutting its investment in new oil production in response to moves by the developed world to use more biofuels. (more…)