Peak Oil - When?

"Shell Chief fears oil shortage in seven years"

From The Times

January 25, 2008

World demand for oil and gas will outstrip supply within seven years, according to Royal Dutch Shell.

The oil multinational is predicting that conventional supplies will not keep pace with soaring population growth and the rapid pace of economic development.

Jeroen van der Veer, Shell’s chief executive, said in an e-mail to the company’s staff this week that output of conventional oil and gas was close to peaking. He wrote: “Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand.......”
"Using more energy inevitably means emitting more CO2 at a time when climate change has become a critical global issue," he wrote.

IEA Urges OPEC to Pump More; Says Stockpiles `Tight' - 2 to 7 years

Bloomberg, Jan 25th 2008

Oil stockpiles are still ``very tight,'' IEA Executive Director Nobuo Tanaka said in an interview today in Davos, Switzerland, where he is attending the World Economic Forum..... A lack of investment could spur an oil supply crunch by ``2010, 2012, some time like that,'' Tanaka said. In its annual World Energy Outlook report in November, the IEA said a supply crunch in the period to 2015 cannot be ruled out.

EU Energy Chief warns about "Peak Oil"

Euractiv, 18 Jan 2008

Energy Commissioner Andris Piebalgs has drawn attention to the 'overlooked' issue of dwindling oil reserves coupled with rapidly growing and unprecedented global demand.

Speaking to the Swiss Energy Congress on 14 January, Piebalgs warned that global energy demand is expected to more than double by 2030, and questioned whether the provision of oil can "keep up" with demand in this period.

With the Commission set to release on 23 January a series of proposals designed to help the EU realise its commitment of reducing CO2 emissions by 20% by 2020, Piebalgs argued that while tackling climate change is crucial, policymakers should not lose sight of the issue of security of fossil fuel supply.

The combined challenge of climate change and supply security leads to the conclusion that the EU cannot "hang on" to its "old, fossil energy system', he said.

Piebalgs referred to varying predictions about when the oil production peak will be reached, with some experts saying it will be in 20 years and others arguing that the world is already at peak production.

Highlighting the potential gravity of the problem, Piebalgs noted that the oil crisis of the 1970s presented a discrepancy between oil supply and demand of only 5%, but that in a post-peak oil scenario, the gap between supply capacity and demand could widen by 4% annually, leading to a 20% gap within five years.

International Energy Agency - 7 years

IEA exec says oil supply crunch looms (Business Week, Tue 11 Dec)

A prominent energy economist warned Tuesday that global oil markets are at risk of being under-supplied as national oil companies gain greater control of the world's petroleum supplies. Some 37.5 million barrels a day of additional oil-production capacity is needed by 2015, but only 25 million barrels a day are planned, International Energy Agency Chief Economist Fatih Birol said.

Oil Depletion Analysis Centre

Already here - Energy Watch Group
The Guardian, Monday October 22 2007

Steep decline in oil production brings risk of war and unrest, says new study

· Output peaked in 2006 and will fall by several % a year
· Decline in gas, coal and uranium also predicted

World oil production has already peaked and will fall by half as soon as 2030, according to a report which also warns that extreme shortages of fossil fuels will lead to wars and social breakdown.

The German-based Energy Watch Group will release its study in London today saying that global oil production peaked in 2006 - much earlier than most experts had expected. The report, which predicts that production will now fall by several percent a year, comes after oil prices set new records almost every day last week, on Friday hitting more than $90 (£44) a barrel.

Lord Oxburgh, former Chairman of Shell - "Oil Industry sleepwalking into crisis"

The Independent, Monday, 17 September 2007

By David Strahan and Andrew Murray-Watson

Former Shell chairman says that diminishing resources could push price of crude to $150 a barrel

Lord Oxburgh, the former chairman of Shell, has issued a stark warning that the price of oil could hit $150 per barrel, with oil production peaking within the next 20 years.

He accused the industry of having its head "in the sand" about the depletion of supplies, and warned: "We may be sleepwalking into a problem which is actually going to be very serious and it may be too late to do anything about it by the time we are fully aware."

The International Energy Agency has forecast what it calls an oil "supply crunch" by 2012, a prediction that Lord Oxburgh said could possibly come to pass.

"Transport Infrastructure will suffer"

Lord Oxburgh, Interview with David Strahan, September 16th, 2007

"It’s worth pointing out the world is never actually going to run out of oil, what it’s going to do is run out of cheap, accessible oil. And fundamentally our world transport infrastructure which is based on the internal combustion engine, and which needs a high energy-density liquid fuel, that is really what is going to suffer." Lord Oxburgh, Interview with David Strahan, September 16th, 2007

Notable Recent Statements Relating to the End of the Era of
Easy and/or Cheap Oil.

Peaking of World Oil Production:
Recent Forecasts Robert L. Hirsch, SAIC (February 2007) US Dept of Energy

David O’Reilly,
Chairman, Chevron

“The time when we could
count on cheap oil... is
clearly ending.”
CERA Energy
Conference. February
2005.



Samuel Bodman, U.S.
Secretary of Energy

“The era of cheap and
abundant petroleum may
now be over.”

Christian Science Monitor.
July 8, 2006


Jeroen van der Veer,
Shell Chief Executive.

“Peak oil does exist for
easytodrill
oil…”

Cummins, C., Williams, M.
Shell's Chief Pursues
Simple Goals. WALL
STREET JOURNAL.
January 17, 2006.


Alpha Oumar Konare,
African Union
Commission Chair.

"The era of cheap oil is
over."

Era of cheap oil is over.
Reuters. 02/04/2006


Viktor Khristenko,
Russian Energy
Minister

“... the era of cheap
hydrocarbons is over".

Hope, C. RUSSIA: 'ERA
OF CHEAP FUEL IS
OVER'. The Telegraph.
06/06/2006.


Guy Caruso,
Administrator.
U.S.EIA

“The era of low cost oil is
probably over.”

Holmes, J. Four Corners
Broadband Edition.
Australian Television
Program. 10 July 2006.

Bank Charges

Like a rerun of the poll tax era, ordinary people are resisting a common injustice, leading Small Claims judges to complain of being swamped by claims against unfair bank charges. (1)

Administering an unauthorised overdraft, or stopping a cheque are variously estimated to cost less than £2.50 or generously assuming senior management involvement, at most £4.50. Yet most automated banks levy unlawful “penalty fees” from £20 to £39.

Contract law states that such charges should merely recover costs and not penalise. Therefore most claims are settled before reaching court. In court, with few exceptions, judges invariably find against the banks, including 8% statutory interest, principally due to their secretive unwillingness to provide evidence of actual costs. (2),(3).

Assisting a number of local households in preparing their claims it becomes apparent that, like a poll tax, charges hurt those least able to afford it - working mother’s on low income.

For example, in six years, the maximum reclaiming period, three households were mugged for an approximate total of £9,900, leading to council tax, rent arrears and further stress from unsympathetic institutions wielding very big sticks.

These losses restricted their ability to provide, undermining their childrens’ general welfare and morale. I wonder what percentage of Working Tax Credit, Child Allowance and minimum wages, purported to lift 3.8 million British children out of poverty, is subsidising the dubious economies of banking tax havens ? (4),(5).

Despite this anti-social behavior, government and employers encourage benefit recipients and employees to use accounts with FTSE listed banks, which made massive £45 billion profits last year.

Which? Consumer group estimates that £4.75 billion, approximately 10-12%, came from illegitimate penalties. By coincidence, a similar amount of annual investment is suggested as necessary to fight child poverty by an “outraged” Save the Children. (4),(6).

With some 60 million people living in Britain, and 580,000 in North Yorkshire, a rough average suggests that banks’ penalty profits are £79 per man, woman and child. Approximately £46 million may be illegitimately skimmed from the local economy annually - over a quarter billion pounds in six years, not including statutory interest.

For the benefit of the local economy and families, particularly those without internet access, I wonder why public bodies tasked with economic development and family welfare, do not provide advice and resources for reclaiming charges en masse ?

In absence of public help those with internet access can find guidance and resources at www.moneysavingexpert.com, www.consumeractiongroup.co.uk and www.bankchargeshell.co.uk.

(1) “Judge threatens banks with test case over 'illegal' charges”, The Independent, 2 July 2007

Http://news.independent.co.uk/business/news/article2720154.ece

(2) “Reclaim Bank Charges”,Moneysavingexpert.com, http://www.moneysavingexpert.com/index.php

(3) Consumer Action Group,

Http://www.consumeractiongroup.co.uk/

(4) “1.3 children million in severe poverty”, Guardian, June 19th 2007,

Http://www.guardian.co.uk/uklatest/story/0,,-6719684,00.html

(5) “Tax us if you can”, Tax Justice Network,

Http://www.taxjustice.net/cms/front_content.php?idcat=30〈=1&client=1

(6) “Bank charges 'cripple most vulnerable'”, The Independent, 2 July 2007

Http://news.independent.co.uk/uk/this_britain/article2723232.ece

Iraqi oil exports stop

Reuters reported on Sunday, 24th October, 2005, that pipeline attacks in the north of Iraq have stopped exports for a least a month and heavy seas are preventing loading of tankers at the main Basra terminal in the south.

That evening, the flagship British news programmes, BBC News, ITV News, and Channel 4 News, despite having two hours of broadcasting time between them, spent about 15 minutes on the hotel bombings in Baghdad as their main news item. None mentioned the pipeline attacks. Possibly our masters don’t want us to be reminded why they invaded Iraq in the first place.

The invasion has so far cost US taxpayers $202 billion and UK taxpayers approaching £6 billion in military costs. Since the invasion until October 20th 2005, there have been 279 attacks on pipelines, installations and oil personnel. It has succeeded in reducing Iraqi oil exports to 1980’s levels which in turn has been estimated to have added $10 to the cost of a barrel of oil on the world market. This is something to think about as we try to fill up at Tescos.

This was the invasion that was supposed, according to its neo-con architects, to pay for itself and lead within a couple of years to a doubling of Iraqi exports and the smashing of the OPEC cartel.

Energy crisis? Resource wars don’t appear the answer.

Global Warming - Peak Oil - Terrorism - Energy Security

Should we be begging central government to place a nuclear power station at RAF Leeming, if the MOD decides it will place the new F-35 joint combat aircraft elsewhere?

Global Warming:

A Pentagon report commissioned in 2003 suggested that global warming, not terrorism, is the greatest threat to civil life(1). The Pentagon official who commissioned the study, Andrew Marshall, issued a brief statement saying it “reflects the limits of scientific models and information when it comes to predicting the effects of abrupt global warming. ... Much of what this study predicts is still speculation.”(2)

However, its worst case scenario said it was plausible that levees in the US (in Sacramento) and Holland would be broken in 2007. In the light of recent events, this may appear overly optimistic.

This report was echoed by Sir David King, the UK's Chief Scientific Adviser, warning that “without immediate action flooding, drought, hunger and debilitating diseases such as malaria would hit millions of people around the world." As example of local impacts, he pointed to increased usage of the Thames Barrier, “…You'll see that instead of using it once every three to five years, we're now using it on average six times a year and the usage anyone can see is climbing upwards.”(3)

The suggestion is that impacts could abruptly accelerate even if carbon emissions are reduced. Due to increasing Arctic meltdown, fresh water entering the Atlantic could slow down or stop the Gulf Stream. In turn this could lead to temperate Europe experiencing Siberian temperatures within decades.

Hurricane Damage:

Although disputed(4), recent increased strength hurricanes were blamed on Atlantic warming(5). Damage to oil extraction and refinement in the Gulf of Mexico and the surge in crude price hit the world’s poorest countries hardest. Fuel price rises coupled with reduction of subsidies sparked fuel riots as far away as Indonesia(6). Nigeria was forced by continued demonstrations to suspend its policy of reducing subsidies and promise that cost of gasoline would not increase further until the end of 2006(7). Richer countries have not escaped, principally the US. 26 IEA member countries agreed to release reserves to prevent US fuel shortages(8). Will this be repeated next year?

Energy Security:

In the long term, the IEA projects that by 2030, without new energy policies, oil demand will rise 50% and gas by 100%, “with most of the easy, low cost hydrocarbons in the Middle East.” The major concentrations located in Iraq, Iran and the ultimate prize, Saudi Arabia. Leaving aside what the rise in demand will do to global warming, some experts suggest that the ability to extract enough oil to meet demand is reaching its peak.

Long term projections are controversial because of secrecy over oil reserves by producing countries. The IEA predicts a peaking in world production in 2050, with all non-OPEC production, currently 60% of world production, peaking by 2010(9). The French government predicts a world peak in 2013(10).
Closer still, “OPEC is pumping at full capacity; prices will continue to rise, because oil is running out,
we are at the doors of a great energy crisis” says the Venezuelan President, Hugo Chavez(11) .

The G20 group of countries predict long term instability and vowed to promote energy saving, alternative energy and reduce oil subsidies(12). Oil multinationals, who presumably know which way the wind blows, rebrand themselves as keen supporters of renewables. BP for example, is now "Beyond Petroleum".

National and Local Impacts:

In the short term, local bus fare rises were blamed on hurricane Katrina(13). Petrol wholesalers predict £1 a litre and beyond in coming months(14). Increased gas and electricity prices are blamed on the peaking of North Sea production and vulnerability to increased wholesale rises of imported fuel from producers such as Russia, Iran and Algeria(15).

The Met Office suggests the coming winter could be one of the coldest for ten years(16). If so, coupled with higher fuel prices, hypothermia deaths rates may rise. For business, the CBI warns that, low national fuel reserves coupled with a long cold winter could lead to hundred of thousands of layoffs. (17) Domestic heating is supposed to take priority in the event of shortages.

However, “....a shortfall of over 10% would be catastrophic. The bulk of demand destruction must come from CCGTs since domestic customers can’t have their supply regulated on a day-by-day basis so a gas shortage manifests itself as an electricity shortage. Commercial customers lose gas, domestic customers lose electricity.”(18)

Resource War, Terrorism and Civil liberties:

Is this global warming-peak oil scenario alarmist? Does it provide clues to the reasoning behind the US/UK governments' aggressive foreign and domestic policy? For example, the brutal invasions of “Pipeline-istan” (19) and Iraq, the current attempts to undermine Iran’s rapidly increasing role in the reconstruction of Iraq? (20) Bush’s demand (in 2002) for fingerprinting/data retention for all E.U. citizens? (21) Is the incessant drumbeat of terrorism, as the principle threat to civil life, a smokescreen to further restrict liberties - applicable as public opposition to future resource wars, along with fuel, food price rises, spark civil unrest?

The Bush/Bliar plan to steal control of Middle Eastern resources is stalled as Iraqi oil output falls to1980’s levels through regular pipeline attacks (22). This was the invasion that was supposed to pay for itself. Iranian-Iraqi economic and structural integration cooperation spins out of US/UK control. (23) (see iraqieconomy.org). Blair holds his hand out to Putin for increased fuel supplies and talks up nuclear power(24). To be fair, leading environmental scientist, James “the prospects look grim” Lovelock, has also promoted nuclear investment as a quick fix to mitigate against the worst impacts of global warming(25).

Locally, government wind farm/ sustainability targets suggest an “excessive concentration on Hambleton” according to local energy watcher, Mr. Mike O’Carroll, REVOLT(26). (www.revolt.co.uk, Newsletter 188). Is a continued total dependence on the grid energy, the most sensible response to local need? How does micro-generation fit into local strategic planning?

Referring to a sustainable housing project in Nottingham, Professor Peter Smith, former Vice President of Sustainable Development at the Royal Institute of Architects suggests that housing, “far from being part of the problem, can be part of the solution.....millions of homes could, if conditions were right, become micro-power stations through the use of photo voltaics and small scale wind.” (27)
Is this vision of energy independence overly optimistic? What feasibility studies have been conducted for North Yorkshire? (28)

Is continued total dependence on the grid energy, wherever it is sited, the most sensible and only response to global warming/local need? As energy costs put further pressure on pockets of slow learners like myself, I suspect many will be asking the similar questions.

Currently, Hambleton D.C. is asking for residents’ views on 400 plus sites suggested for future developments at exhibitions and meetings. It will be interesting to see how energy security fits in with the Local Development Framework. (29)

References:
1. Global Business Network, February, 2004.
2. MSNBC News, February, 2004, “Storm over Pentagon climate scenario”.
3. Greenpeace Business Lecture, 20th, October, 2004.
4. Tech Central Station, 16 September, 2005, “Global Warming and Hurricanes: Still No Connection”.
5. Nature Online Magazine, July 31st, 2005, “Increasing destructiveness of tropical cyclones over
the past 30 years”.
6. Washington Post, October 3rd, 2005, “High Oil Prices Met With Anger Worldwide”.
7. BBC News, 9th September, 2005, “Nigerian March against fuel hikes”
8. Reuters.com, 2nd September, 2005,
9. Energy Bulletin, 20th September, 2005, “IEA:Non-OPEC oil production to decline after 2010”
Non-OPEC countries include such large producers as Russia, China, the US, Mexico, Kazakhstan,
Azerbaijan and Norway.
10. BBC News, 10th June, 2005. “Peak oil enters mainstream debate”.
11. & 12, AME Info, Middle East Business Resource, 16th & 17 October, 2005.
13. The Northern Echo, October 6th, 2005. “Oil prices blamed as bus fares rise”.
14. The Independent, October 18th, 2005. “Rising fuel prices push up inflation”.
15. Prospect Union News, 12th September, 2005. “Predicted big chill threatens winter blackouts “
16. The Met Office, Winter forecast 2005/6 (Dec/Jan/Feb).
17. The Scotsman, 24th October, 2005, “Britain set to run out of fuel warns CBI boss.”
18. Energy Bulletin, August 28th, 2005, “UK gas and electricity crisis looming”.

CCGTs are combined-cycle gas turbines which use both gas and steam turbine cycles in a
single plant to produce electricity with high conversion efficiencies and low emissions.






29. Copies of the Local Development Framework & Local Agenda 21 - Sustainable Development are obtainable from www.hambleton.gov.uk/hambleton/environment.nsf/pages/environment.html

A Hambleton valley view

Sutton bank in winter. A place to go for a
bigger perspective.