Peak oil is the situation in which demand outstrips our ability to produce. We may already have hit that point or it may happen soon. What will happen as production declines while demand continues to increase? How will it affect our food supply as 17% of oil production goes to farming and distribution of our food? What will happen to the US economy that is utterly dependent upon cheap oil? What will happen to the world's economy How can we adapt? The goal of This Week in Peak Oil is to discuss all aspects of the impending peak oil crisis.
In this week's edition (just click on an item to go down to the excerpt):
Oil man has his head in the oil sand
The Wall Street Journal, not surprisingly, allows Nansen G. Saleri to demonstrate how to most comfortably keep your head in the oil sand. The WSJ let Saleri, current president and CEO of Quantum Reservoir Impact in Houston, former head of reservoir management for Saudi Aramco, write an op-ed entitled "The World Has Plenty of Oil".
Many energy analysts view the ongoing waltz of crude prices with the mystical $100 mark -- notwithstanding the dollar's anemia -- as another sign of the beginning of the end for the oil era. "[A]t the furthest out, it will be a crisis in 2008 to 2012," declares Matthew Simmons, the most vocal voice among the "neo-peak-oil" club. Tempering this pessimism only slightly is the viewpoint gaining ground among many industry leaders, who argue that daily production by 2030 of 100 million barrels will be difficult.
In fact, we are nowhere close to reaching a peak in global oil supplies.
Given a set of assumptions, forecasting the peak-oil-point -- defined as the onset of global production decline -- is a relatively trivial problem. Four primary factors will pinpoint its exact timing. The trivial becomes far more complex because the four factors -- resources in place (how many barrels initially underground), recovery efficiency (what percentage is ultimately recoverable), rate of consumption, and state of depletion at peak (how empty is the global tank when decline kicks in) -- are inherently uncertain.
(WSJ)
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Fears of a commodity crash grow
Ambrose Evans-Pritchard writes in the Telegraph that fears are growing over a commodity crash. Speculation over sugar cane futures are racing out of control. In this case speculation is outstripping demand. The problem is that it takes one unit of oil to create 1.3 to 1.4 units of biofuel. That is extremely inefficient.
India faces a mountain of surplus sugar. Over 20m tonnes sit in warehouses, begging for buyers.
Brazil has ramped up cane production in a burst of expansion. It is now exporting record amounts of sugar, even after diverting half its harvest into ethanol for cars.
By any definition, there is a global glut. Yet this has not stopped sugar futures jumping 40pc since December, reaching 14.18 cents (7.1p) a pound on the March 2008 contract.
Sugar has been swept up with the whole gamut of commodities - grains, metals, oil and gas - in a fevered surge of investment in futures contracts, regardless of the real demand from daily users. Wheat has risen 112pc in four months.
Judy Ganes-Chase, a commodity expert at J Gaines Consulting, said the market had become unhinged.
"Investors have made far too much of the link between sugar and biofuels. We've had one massive surplus after another, yet people still keep planting more cane. Brazil is the only country where ethanol is actually viable in cars. Everywhere else is building up sugar stocks in mere hope," she said.
(telegraph.co.uk)
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Algae as a biofuel
Michael Briggs, PhD, U of NH Physics Dept, has written a paper on the possibility of using algae to create biofuel. Here's the link to his paper although the site has plenty of detail. The problem with biofuel is it takes so much energy to create one unit of biofuel. The payback is in the range of 1 barrel of oil can create 1.25 to 1.50 units of biofuel. Unfortunately, oil production is way more efficient.
As more evidence comes out daily of the ties between the leaders of petroleum producing countries and terrorists (not to mention the human rights abuses in their own countries), the incentive for finding an alternative to petroleum rises higher and higher. The environmental problems of petroleum have finally been surpassed by the strategic weakness of being dependent on a fuel that can only be purchased from tyrants. The economic strain on our country resulting from the $100-150 billion we spend every year buying oil from other nations, combined with the occasional need to use military might to protect and secure oil reserves our economy depends on just makes matters worse (and using military might for that purpose just adds to the anti-American sentiment that gives rise to terrorism). Clearly, developing alternatives to oil should be one of our nation's highest priorities.
In the United States, oil is primarily used for transportation - roughly two-thirds of all oil use, in fact. So, developing an alternative means of powering our cars, trucks, and buses would go a long way towards weaning us, and the world, off of oil. While the so-called "hydrogen economy" receives a lot of attention in the media, there are several very serious problems with using hydrogen as an automotive fuel. For automobiles, the best alternative at present is clearly biodiesel, a fuel that can be used in existing diesel engines with no changes, and is made from vegetable oils or animal fats rather than petroleum.
In this paper, I will first examine the possibilities of producing biodiesel on the scale necessary to replace all petroleum transportation fuels in the U.S.
(American Energy Independence)
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Not a peak oil denier, but a peak oil moron
As always, I find a peak oil denier or in this case a peak oil moron. JD writes a blog called Peak Oil Debunked. His mission is to debunk
"...peak oil hype with facts and figures, and exposing the agendas behind peak oil. DISCLAIMER FOR IDIOTS: This site officially accepts that oil is finite, and will peak someday."
See ... he's not a denier! I came across an article which "debunks" peak oil by means of moronic logic. A classic example of moronic logic would be: "A dog is a pet, dogs bark. A cat is a pet, therefore, cats bark." Moronic logic always relies on a weak therefore. JD uses several true facts from a reputable source, but makes the typical moronic leap to a logical fallacy. Here's the essence of JD's argument:
Henry Groppe is a very well-respected oil analyst, and on a couple of occasions he has described a common sense mitigation process for the early phase of peak oil:
- [Henry Groppe] believes that something like 20mbpd of the current 84mbpd of oil demand is going for heat and power generation primarily in developing countries. He thinks that with oil in the $50-$60 range, all of this will get converted to coal or natural gas, and that, along with vehicle fuel efficiency, will be the main initial responses to peaking, and will keep us out of serious economic pain for a decade or so.Source
(Peak Oil Debunked)
JD argues that we can simply replace 20% of oil consumption with coal and natural gas. He hopes that arguing at great length will prove his argument. The problem with his logic is that he fails to recognize that if we ramped up our use of coal and natural gas to replace the 20,000,000 barrels of oil per day that are used for heating, we fairly quickly hit peak coal and peak natural gas. He assumes that coal and natural gas won't peak. Oops. Here's the basic diagram of his argument:
- Oil will peak
- 20% of oil is used for heating
- We have plenty of coal and natural gas
Therefore:
- Coal and natural gas can postpone peak oil for a long, long time
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Mayor of London sees peak oil opportunity
London Mayor Ken Livingston sees the threat of a peak oil crisis as an opportunity to force through legislation to combat global warming and achieve a more sustainable economy:
Peak oil is not a threat but an opportunity to force through the policies needed to combat climate change, according to London Mayor Ken Livingston.
Mr Livingston was speaking at the Ecobuild trade fair in London's Earls Court on Thursday, during an environmental hustings featuring the three main candidates in the election for London mayor, to be held on 1stMay. In answer to a question from Global Public Media's David Strahan about what the candidates would do to protect London from peak oil, Mr Livingstone said "I don't see this as a threat, I see it as an opportunity... it may be the only way that we face up to having to reduce our energy consumption".
Mr Livingston said that "almost every government on the planet is too cowardly to tell its people how much they should pay for energy", but when peak oil brings escalating prices "we'll know the real cost of putting oil in the tank of our car, and we will scale down our energy consumption to cope with that".
(Global Public Media)
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DEA Podcast w/ David Strahan
Sorry ... flash audio not permitted at dKos. Just follow the link below:
This podcast is about an hour long. Hat tip to Best Free Documentaries.
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OPEC: what me worry?
OPEC will admit to peak oil about the time when George W. Bush admits he was wrong to invade Iraq and horribly bungled the occupation. So the quotes coming out of Vienna where OPEC are holding meetings are ... well ... typical:
Oil prices, which hit a record high last week, may have further to rise due to the element of speculation in the market, the head of Libya's OPEC delegation Shokri Ghanem said on Monday.
Oil touched a record peak of $103.05 a barrel last week, and officials from the Organization of the Petroleum Exporting Countries have blamed factors beyond its control, such as speculation and the weak dollar, for oil's record run.
"I think that the price could go up," Ghanem said. "Everything is volatile, we are in the age of volatility and speculation."
"The physical market is different from the paper market. We are living in kind of virtual oil markets."
Ghanem, who is in Vienna to attend an OPEC meeting on Wednesday, reiterated that he did not expect the group to change its oil output.
"At this level of the price, I would think that things will be postponed," he said. "It's not a good time for action. It is a time for watching."
Libya's state-owned National Oil Corporation has been signing a spate of deals with foreign energy firms to help develop its oil and gas reserves.
(The Guardian)
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Peak oil hits Trinidad & Tobago?
If you think about it, it seems logical that the small, poor island nations of the Caribbean that rely heavily on tourism would be hit hardest and soonest by peak oil. Mary King speculates that they may be suffering from the "Dutch Disease" which Wikipedia defines as:
Dutch disease is an economic concept that tries to explain the seeming relationship between the exploitation of natural resources and a decline in the manufacturing sector. The theory is that an increase in revenues from natural resources will deindustrialise a nation's economy by raising the exchange rate, which makes the manufacturing sector less competitive. However, it is extremely difficult to definitively say that Dutch disease is the cause of the decreasing manufacturing sector, since there are many other factors at play in the economy. While it most often refers to natural resource discovery, it can also refer to "any development that results in a large inflow of foreign currency, including a sharp surge in natural resource prices, foreign assistance, and foreign direct investment."
(Wikipedia)
So when Ms. King talks about "Dutch Disease" how much of it is the ever-rising price of oil, the decreasing production capability and Asia's increasing demand for oil? In other words, how much of it is peak oil?
The Central Bank Governor in agreeing that fiscal policy provides a special challenge for natural resource based economies demurred by saying that higher oil revenues provide these governments with the opportunity to increase public spending on priority economic and social goals. However, these "fortunate" governments are faced with the trade-off between pressing development needs and the limits of the countries' institutional and absorptive capacities. The Governor also warned us before of the slippery slope of economic decline after a 10 per cent inflation rate. We only need to look at the success of Botswana(a resource rich country) to see that our Executive (as hinted by the Governor) lacks the policies and institutions required to manage a resource rich country.
The Central Bank correctly identified one result of the Dutch disease as a shift from our already small manufacturing sector to the production of non-tradable goods and services-a move in the direction opposite to what we need if we are to sustainably diversify the on-shore economy.
We have found ourselves in a situation in which Peak Oil is in part driving the price of imported food, now running at an inflation of 10 per cent on average the world over, which many see as a demand for investment into local agriculture-i.e. encouraging the banks to give loans etc. However, because of the profligate spending of the Executive (under whose watch agriculture declined) the Central Bank is taking money out of the economy, to curb spending so limiting investment in order to constrain inflation. Our Government may be "fortunate" that energy prices are high but the poor and the middle class are being ravaged by inflation.
(Trinidad & Tobago Express)
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Prof. Lovelock is bit cranky, but probably right...
So what can you do personally about peak oil? James Lovelock has a few opinions. While he might a little cranky, he might be correct. He's been studying it for a long, long time. He correctly predicted in the 60s that the environment would be the biggest problem facing humanity at the turn of the century. He posited the Giaia theory. He invented the device to detect the holes in the ozone layer. I highly recommend reading the whole article, it's quite fascinating:
As with most people, my panic about climate change is equalled only by my confusion over what I ought to do about it. A meeting with Lovelock therefore feels a little like an audience with a prophet. Buried down a winding track through wild woodland, in an office full of books and papers and contraptions involving dials and wires, the 88-year-old presents his thoughts with a quiet, unshakable conviction that can be unnerving. More alarming even than his apocalyptic climate predictions is his utter certainty that almost everything we're trying to do about it is wrong.
On the day we meet, the Daily Mail has launched a campaign to rid Britain of plastic shopping bags. The initiative sits comfortably within the current canon of eco ideas, next to ethical consumption, carbon offsetting, recycling and so on - all of which are premised on the calculation that individual lifestyle adjustments can still save the planet. This is, Lovelock says, a deluded fantasy. Most of the things we have been told to do might make us feel better, but they won't make any difference. Global warming has passed the tipping point, and catastrophe is unstoppable.
"It's just too late for it," he says. "Perhaps if we'd gone along routes like that in 1967, it might have helped. But we don't have time. All these standard green things, like sustainable development, I think these are just words that mean nothing. I get an awful lot of people coming to me saying you can't say that, because it gives us nothing to do. I say on the contrary, it gives us an immense amount to do. Just not the kinds of things you want to do."
He dismisses eco ideas briskly, one by one. "Carbon offsetting? I wouldn't dream of it. It's just a joke. To pay money to plant trees, to think you're offsetting the carbon? You're probably making matters worse. You're far better off giving to the charity Cool Earth, which gives the money to the native peoples to not take down their forests."
Do he and his wife try to limit the number of flights they take? "No we don't. Because we can't." And recycling, he adds, is "almost certainly a waste of time and energy", while having a "green lifestyle" amounts to little more than "ostentatious grand gestures". He distrusts the notion of ethical consumption. "Because always, in the end, it turns out to be a scam ... or if it wasn't one in the beginning, it becomes one."
(The Guardian)
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Deutsche Bank's report on 100 mbpd peak oil market
Deutsche Bank released a report on February 27, 2008 and Jim Kingsdale thinks they "pulled their punches on where they really think oil prices may go" so that they wouldn't offend or upset any clients. At least they are edging closer to admitting the truth. They guess that oil will reach $150 by 2010. But hold on a second. Serious experts were saying as late as August of 2007 that $100/barrel was impossible. So why not $150 by this summer? Kingsdale says:
DB made some good points that might be news to the mainstream but probably not to my readers:
- The U.S. economy wrung a lot of oil-intensiveness out during the '70s oil shock when it took oil out of electricity generation and U.S. industry became much more oil-efficient. Those savings cannot be replicated no matter how high the oil price goes.
- On the other hand, U.S. transportation is vastly inefficient and thus can and will reduce oil use as prices rise. This is the most significant available source of oil savings in the OECD world. Of course, DB probably meant to say "cars" rather than "transport", since trucks which use 1/3rd of transport fuel do not have the same savings potential that cars do.
- On the third hand (they are economists, after all) higher oil prices seem to have caused lower production of oil, not higher - the very subject we recently discussed here. We'll come back to this point.
- The greatest demand destruction from higher oil prices will be in India, China and the developing world other than oil exporters. It will cut their growth rates down by several percentage points. Sad to say DB fails to understand or at least take any note of the fact that the cruelest, if not largest, impact of higher oil prices is on poor people and poor countries around the world.
(Trade Observatory)
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Peak oil reaches the Japanese Parliament
This is great news that the Japanese are awakening to the looming peak oil crisis.
There was a conference yesterday, Feb 29 about Peak Oil and how Japan will be affected. The venue was the House of Councillors, at the Japanese Parliament in Tokyo. The speaker was the author of several books and articles about Peak Oil, Ishii Yoshinori.
Ishii argues for (among other things) a "Plan B" for Japan's energy needs, with investments in train services instead of cars, a focus on local food production, less meat consumption, and energy savings at home. Ishii also thinks Japan's population should be allowed to shrink and worries that China will also be hit hard by Peak Oil, perhaps even this summer during the Olympics.
Peak Oil refers to the growing gap between oil demand and production. It is the point when the maximum rate of global petroleum production is reached, after which the rate of production enters a decline. If global consumption is not reduced before the peak, an energy crisis will certainly develop because oil will be less available. Prices will then rise dramatically, as we have seen in the past year.
Ishii Yoshinori has written extensively about energy issues for years, noting that "mother earth is limited and our resent civilization which is supported by cheap abundant oil is about to end. Unable to perceive this "Oil peak", Japan has been wasting a large amount of money, e.g. for infrastructures for motor vehicles." He strongly believes that we should abandon the present wasteful civilization.
(Kurashi - News from Japan)
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Peak oil gettin you down? How about a pep talk
If you imagine the possible bad peak oil scenarios, it might make you want to crawl back into bed with a gallon of ice cream, a box of fig newtons, a bag of Doritos and have a Stuart Smalley-esque meltdown. Thankfully, Richard Heinberg comes to your rescue with a pep talk and some helpful suggestions about how to cope. He actually has some good things to say about how to cope with outrage fatigue, too.
Awareness of Peak Oil, Climate Change, impending global economic implosion, topsoil depletion, biodiversity collapse, and the thousand other dire threats crashing down upon us at the dawn of the new millennium constitutes an enormous psychological burden, one so onerous that most people (and institutions) respond with a battery of psychological defenses-mostly versions of denial and distraction-in an effort to keep conscious awareness comfortably distanced from stark reality. I discuss this in "the Psychology of Peak Oil and Climate Change," chapter 7 of Peak Everything, where I conclude that the healthiest response to dire knowledge is to do something practical and constructive in response, preferably in collaboration with others, both because the worst can probably still be avoided and because engaged action makes us feel better.
Some people who are aware of global threats respond psychologically with a relentless insistence on maintaining mental focus on possible positive futures, however faint their likelihood of realization. Other knowledgeable people are irritated by this behavior and prefer to plunge themselves into prolonged contemplation of the worst possible outcomes. On various Internet discussion sites this split plays out in endless flame-wars between "doomers" and "anti-doomers" (the latter differ from cornucopians, who deny that there is a problem in the first place).
...
Burnout and depression are certainly understandable given the scale of the challenges facing us, but these responses cause problems since other people depend on us. Each of us who understands global crises and has some capacity to work on intelligent responses to them represents an enormous cultural investment. I'm thinking not just of the decades' worth of resources consumed in order to keep each of us alive and get us to where we are today, but of the information so carefully sought out and digested, and skills learned. These are not trivial things. I don't say this in order to motivate by guilt; it's simply the reality. If one of us falters, there are not millions and billions to take our place. There may indeed be many millions worldwide who are engaged in some type of vaguely benevolent enterprise, but when it comes to the core threats facing our planet, the ranks are remarkably thin. There are probably more like a few thousand globally who really understand the world resource problematique and are doing something sensible to address it.
(Post Carbon Institute)
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Here's how to educate about peak oil
These are comments on this article which doesn't say anything really new about peak oil. However, the following two comments provide an excellent example of how to educate, one on one:
at 3/1/2008 7:44:02 AM, Energy Independence said:
Stop funding the terrorists! No more Oil Wars! Energy Independence Now! Drill in Anwar. Build more nuclear power plants Use More coal. Use more natural gas Turn trash into energy Double the efficiency of windmills and solar cells. If France can do nuclear power so can we. If Brazil can do biomass/ethanol power so can we. If Australia can do LNG power so can we. Domestically produced energy will end the recession and spur the economy. Stop paying oil dollars to those who worship daily at the alter of our destruction. Preserve our Civil Rights and defend our Freedom by ending dependence on foreign oil.
at 3/1/2008 10:34:43 AM, Pythor Sehn said:
Energy Independence, What you have is a box of band-aids. You're trying to treat the symptoms and not the disease. The disease is the belief that we can forever operate our economy as a infinite growth and consumption engine, coupled with infinite population growth, on a continent with finite resources. We don't need a hysterical grab at every last energy source we can find in a mad attempt to continue business-as-usual. We need to abandon the parasitic nature of our culture and transform it into something sustainable. In terms of those band-aids, your suggested use of more coal will cause more global warming, which will dash to pieces your hopes for using ethanol as a fuel source (which is a joke in itself: burning our food supply, causing inflation, increasing pollution, destroying topsoil, polluting land, air, and water...). Global warming will wreck our crop lands and deplete our water. Ethanol takes a heck of a lot of water to produce. And in case you didn't notice, the Earth's topography isn't homogeneous: the conditions for Brazil's ethanol production absolutely cannot be replicated here. Ethanol is a scam. And I hope you're not also suggesting we import Brazil's sugar cane slavery, too. Let's see. Natural gas has some geographical constraints, and it will also be peaking, most likely after oil and before coal. Then what? That's short-sighted. Wind and solar are still plagued with problems of storage, scale, grids, and intermittency. Nuclear power coupled with breeder reactors is about the only thing that might help. But again, none of this matters unless we can achieve a situation in which our rate of consumption of natural resources is equal to or less than nature's production rate.
(design news)
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Peak oil: true or false
Stephen Lendeman attempts to answer once and for all is peak oil true or false? In his lengthy article, he seems to come down on the side of the logical atheist who worries if he's covering all his bases. He hopes that abiotic oil is real and drillable, but worries about the potential of peak oil if abiotic oil doesn't pan out. What Lendeman fails to do is analyze the entire issue of peak oil holistically. His closing exemplifies his blinders:
If abiotic theory proves false or overrated, however, and orthodox geology is right, then controlling world oil reserves is even more important. It means peak oil is real, cheap oil is running out, heavier oils are more important, and cornering what's left will be Priority One for all major world powers.
There you have it - peak oil or vast untapped amounts of the abiotic kind awaiting new technology to access it. Readers can weigh the evidence, find more on their own, and decide what's true or false. In the fullness of time we'll know, but for now we must rely on our best judgment with plenty of ammunition on both sides of the argument to consider.
[emphasis mine]
(oped news)
The issue isn't simply whether or not we're going to run out of oil, how soon or when will our magic bullet will be delivered to the faithful by their benevolent god ... or whatever. The issue is we have an unsustainable economy, an entirely oil-dependent civilization. Absolutely everything we see and do is dependent upon oil. Those skyscrapers, that vacation to India or Italy, your mail, our food supply, our appliances and most obviously your 7MPG SUV you drive yourself around in.
Personally, I think what defines progressives, and Lendeman claims to be one, is that we analyze issues holistically. He delinks global warming from peak oil when they are just different faces of the same devil. Where does American imperialism come in? What about the threat of the Bush Administration's goal of perpetual war to ensure our long-term domination of the planet? The American government's desire (regardless of whether or not its Dem or Rep) to control the world's oil supply? So where is the holistic analysis, Mr. Lendeman?
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David Brower: serious journalism, seriously circular logic
The most important thing about being a serious journalist in this modern age is that while you can be really wrong on a topic, entirely miss the point, your opinion must be taken seriously because you are a serious journinamilist. Do you follow the circular logic?
Brower's contention is that
- because peak oil advocates while guessing and estimating actually oil reserves in analyzing when the peak might have been or will be and
- not getting it right in his serious opinion
- must not be taken seriously because he is a serious journamilist who never could get anything wrong ever because he is a serious journamalist.
- and because he says so.
- and because he derogatorially describes peak oil advocates which proves he is correct.
This is the saddest example of an obviously intelligent journalist who based upon his background should have a keen insight into peak oil, but let's himself be blinded by his high opinion of himself and love of his insider status. He thinks we will magically uncover vast oil reserves and he lies to himself that oil discoveries didn't peak in 1930. Maybe he's iignorant? Wouldn't be the first time a serious journamilist was surprisingly uninformed. He actually even thinks that demand is going down. Seriously deluded, but yet very serious... trapped inside his circular logic he even accuses peak oil advocates of circular logic.
There are good reasons why the world should wean itself from oil - but the doomsday cult of peak oil isn't one of them.
The theory has been around for as long as people have been extracting oil. It has been getting its predictions of the end wrong, repeatedly, for just as long. It's hard to keep track, but the latest forecasts say we'll reach the peak as early as 2010. Kenneth Deffeyes, the Princeton professor who is a doyen of the movement, even says it happened in 2005.
Just because the predictions have been wrong before doesn't mean they'll be wrong next time. And there is a grain of truth to peak oil theory. Oil is a finite reserve, so the more we extract, the closer we come to exhausting the resource.
The theory's proponents - a rag-bag of geologists, green activists, Malthusians, and people who yearn for a return to some pre-industrial idyll - are making noise again now because the price of oil is so high and western nations are struggling to increase their production and replace their reserves.
But those are spurious connections...
(The Guardian)
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Life after the oil crash
Another way to refute peak oil is not to refute the science, but to switch the focus.
The grab-your-gun-and-head-for-the-hills scenario goes something like this: In the next year or so, world oil production will peak and then promptly plummet, forced down by sinking reserves. While supply crashes, demand will grow. Virtually overnight, fuel will become so dear that farm tractors will go idle, people will go hungry and homes will go cold. Financial markets will collapse and social chaos will follow.
Are you ready?
The doomsday image may sound like the half-baked plot of a Schwarzenegger flick, but thousands of North Americans are taking it seriously enough to stock up on non-perishable food, recycle their own manure, build home gardens, bone up on canning techniques, even undergo "socially responsible vasectomies" to limit their energy reliance.
(Globe and Mail)
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