$108 a barrel oil: things are gettin' ugly

It was merely a few weeks ago that oil hit the mythical $100 a barrel threshold, which was sort of a psychological barrier for many who want to keep thinking of oil as an endless, cheap form of energy, not something that is going to become vastly more expensive in the near future.

Today oil hit $108 a barrel, and gas prices are sure to rise accordingly in the coming days.

The linked article shows a photo of gasoline going over $4 a gallon in Los Angeles. (Of course, here in British Columbia, gas has been over the equivalent of that for awhile now.) With the busy summer driving season coming -- at least in theory since many may choose to vacation near home or in their homes -- gasoline prices may surge to unthought of heights.

Canadians may see gas rise even more since Esso's Strathcona refinery in Alberta is still not producing near capacity due to an undisclosed problem.

   Canada's gas consuming public fear of gas prices going up in the coming days until the plant breakdown is fixed. The country is experiencing an under capacity as for the past three decades, no new refineries were built as cars on the road continued to increase.

   Royal Dutch Shell PLC has similar problems due to delays caused by unplanned maintenance at Shell's Scotford refinery near Fort Saskatchewan.

The oil industry is surely very aware of Peak Oil and the fact they haven't invested in refineries suggests they know crude oil does not have a long future.

Unfortunately, this will reignite the interest in converting Alberta's tar sands into oil, a process which requires mass inputs of natural gas (another fossil fuel rapidly going into decline in North America) and water.  This is environmentally devastating and should not even be considered as a last resort.  Other people will try to tout biofuels as a replacement, despite growing evidence that it creates more global warming inducing carbon gas as well as force the price of food to go up.  

North Americans are nowhere near the point they need to be at: a massive shift in lifestyle must take place.  Currently, people are in denial and bargaining with suspect technological "fixes" rather than accept our current lifestyle does not have a long future.  Do people feel that filling up the SUV is more important than keeping croplands meant for food production and slowing the increase of greenhouse gases?  

Now we'll just wait to see if people really do change their driving habits or if it'll take $7 or $8 a gallon to really alter how people live.

I don't have any deeper analysis of what's going on.  The United States is in the midst of a monumental financial failure (click here for a bunch of depressing articles) converging with a cheap energy crisis with climate change acting as the dark overseer.  If I had a solution, I'd offer it, but there's so much inertia in the business/industrial realm to fight that it's overwhelming.  

Back to your usual program of Obama Vs. Clinton in petty "he said she said"....

•  Tip jar + kitty photo

  We need something to cheer us up after this depressing wave of bad news:

  

  by ssmt on Mon Mar 10, 2008 at 12:43:14 PM PDT

  •  Why do we think $7 gas will change things?

    After all, gasoline was under $1 just prior to George the W.   We are over 3 times that level, in less than a year, and usage is up rather than down.

    People look down, at the price that they remember, rather than consider the likelihood that it will be higher tomorrow.

    This is yet another reason for a steadily mounting fee on gasoline ... money to be used to help foster an energy efficient future (and help the transition of those lower on the economic ladder).  If people & companies knew, without a doubt, that energy will cost more tomorrow than today, and more the day after, they might be more likely to make energy efficient choices -- especially if those choices were fostered by other structural elements in society.  

    by A Siegel on Mon Mar 10, 2008 at 01:49:23 PM PDT

•  I'm gonna drink beer and

  get my bike in shape tonight.  Its been a long winter with alot of driving.

  by environmentalist on Mon Mar 10, 2008 at 12:55:42 PM PDT

  •  Beer and biking

    Just be careful how much beer is consumed during the tuneup process; otherwise it might be a wobbly ride all summer :)

    by ssmt on Mon Mar 10, 2008 at 12:58:11 PM PDT

•  They been ugly for a while n/t

  by ThatPoshGirl on Mon Mar 10, 2008 at 12:57:07 PM PDT

•  Humphrey and I are going to rent ourselves a

  couple of burros and do us a lil prospecting up in the Sierras..Iffin that dont pan out[No pun intended or implied] we just heard recently about this black bird that is supposedly wurth mucho diniro..we dont neeeed no stinkin badges ! Vamoose

  by Johnny Rapture on Mon Mar 10, 2008 at 01:00:49 PM PDT

•  asdf

  I had a conversation with my mother yesterday (fixed income) and she was mentioning the cost of groceries.  Today at lunch the conversation was... the cost of gas and the cost of groceries.  People are being hit in the wallet and when that happens people start looking around for someone to blame.  Bush tried to kick this implosion down the road to the next (democratic) president, but looks like it caught up with him.  He will need that ranch in Paraguay, because people are going to be looking for his head on a platter.

  by BDA in VA on Mon Mar 10, 2008 at 01:03:54 PM PDT

  •  This is how the RW spins it

    if only we could drill the Artic Natural Refuge, if the those tree huggung lie-bruls allow us to build more reineries, and the yo-yo's drink it up

    by Mr Stagger Lee on Mon Mar 10, 2008 at 01:08:03 PM PDT

    •  Yeah, that's an aggravating spin

      By the time that area got online and actually providing oil (maybe 10 years from the moment it got opened), the US will be so far behind in what it requires to operate that it'll make zero difference.  

      The Arctic Wildlife Refuge is the ultimate in denial of the real problem.

      by ssmt on Mon Mar 10, 2008 at 01:10:49 PM PDT

    •  'Cept...

      Every time they mention selling off of federal land for oil or gas, they fracture their base of blue-collar hunters.

      by RichM on Mon Mar 10, 2008 at 01:12:44 PM PDT

    •  ANWAR reserves worth 6.7% of consumption

      From my diary today:
      

      The USGS estimates that [ANWAR] contains a mean expected value of 10.4 billion barrels of technically recoverable oil... ANWR could produce nearly 1.4 million barrels of oil [per day]. (DOI)

      US crude consumption is 20,687,000 barrels/day. (EIA)
      10.4 billion / 1.4 million / 365.25 days = 1.4 million barrels/day for 20 years.
      1.4 million / 20.687 million = 6.7% of daily consumption

      Excellent! The US is now providing up to 30% of its crude oil consumption.  Now if only we can cut out the 70% provided by countries which piss us off...

      /pimp

      by opendna on Mon Mar 10, 2008 at 02:00:48 PM PDT

  •  But ...

    Democratic Leaders should have been screaming this from the roof-tops, constantly speaking to the hole George the W has dug for us all.  And, fought for serious measures that would help turn this around (even if George the W would veto them), rather than half-measures like last December's energy bill.  Or not cleaning up W's Tax Increases on the Unborn now.

    by A Siegel on Mon Mar 10, 2008 at 01:51:20 PM PDT

•  You said it

  The oil industry is surely very aware of Peak Oil and the fact they haven't invested in refineries suggests they know crude oil does not have a long future.

  Exactly.  Although if you ask BigOil, America has been rough on them.  Seven long years of environmental activism by George Bush and his father Dick Cheney.  How could an oil company ever get a refinery built, what with all the tough government oversight?

  Thanks for putting it so well, diarist.

  by deben on Mon Mar 10, 2008 at 01:12:06 PM PDT

  •  Respectfully disagree

    Big Oil doesn't build refineries because more refinery capacity means lower prices for refined products. Limited refinery capacity is the main reason U.S. gas prices skyrocket every early summer, and that's exactly the way the refiners like it.

    by Fischer on Mon Mar 10, 2008 at 01:29:53 PM PDT

    •  We agree

      that restricting supply is one of their motives.  Absolutely.  I'd say another is that they recognize that there is a finite amount of oil to be pumped.

      by deben on Mon Mar 10, 2008 at 01:47:56 PM PDT

•  is oil really going up that much

  How much is devaluation of the dollar?

  by mollyd on Mon Mar 10, 2008 at 01:19:30 PM PDT

  •  That and a ton of money looking for safety

    Seems like the story is investors are pouring money into oil what with the stock market on shaky ground.

    by catnap1972 on Mon Mar 10, 2008 at 01:21:48 PM PDT

•  I can't comment on Canadians'...

  ...reactions to impending crisis, but from my 50 or so years of public awareness ( I don't count any thing prior to my 18th birthday as I was engaged for the most part in dealing with hormonal discordance)I have observed that the American public reacts after the crisis (real or fabricated) has occurred.
  When fuel prices, increased food price (due to transportation cost and food cropland converted to fuel cropland), non food consumer prices rise due to the anemic American dollar, a crushing national debt that the 7th generation will still be paying off, then, finally, the public will have a WTF moment, and only then, will significant action begin.
  It's sad, but I can't think of a major proactive program that has occurred.  The exception to that would be the proactive measures we took concerning the possibility that a 3rd world, tinpot, dictator might attack us with WMD's, and we all know that worked out splendidly.

  by carver on Mon Mar 10, 2008 at 01:19:44 PM PDT

  •  Then bring on the Collapse!

    The sooner, the better.

    by opendna on Mon Mar 10, 2008 at 02:02:41 PM PDT

    •  You're probably right

      The more complicated the system gets, the harder the collapse will be.

      by ssmt on Mon Mar 10, 2008 at 02:04:14 PM PDT

      •  In a vulnerable economic system...

        ...the failure of any one of the sub-systems can bring about a very rapid cascade effect, which brings down the whole enchilada.

        by carver on Mon Mar 10, 2008 at 02:31:48 PM PDT

•  inertia is right

  Like you, who the heck knows where to start.  I have yet to be convinced that the long-term solution will not involve solar to a large degree, but the technology is still in its infancy in terms of being large scale.  We are left to wonder where we'd be if all the oil tax breaks in the past 20 years had gone to developing alternatives instead.  more importantly, we need to start doing it right moving, forward, regardless of the past.

  The key is - like an alcholic - we have to start by admitting the scope of the problem.  And we ain't there yet.

  by eparrot on Mon Mar 10, 2008 at 01:20:57 PM PDT

  •  I dont' think technology can "save" us

    After all, technology is not energy, no matter what the kids who run Google might think.  I think that the big elephant in the room is that we may have to drastically scale back our energy consumption and essentially abandon an oil-based infrastructure that we spent our entire national wealth building.  That could be the problem in a nutshell.  People will keep beating the horse, no matter how dead, if they sunk their entire fortune into it.  Oil, like the horse, will not last forever.  Yet the entire country was built to run on it.

    The sad reality is that all the alternative fuels in the world don't add up to more than maybe 15%-20% of our needs.

    And some may be just as harmful as the carbon dioxide burning fossil fuels creates.

    I know a lot of people want a Star Trek future, but what if that ain't gonna happen?

    We need to start figuring a practical, realistic future based on what we do currently have and what is feasible.

    by ssmt on Mon Mar 10, 2008 at 02:03:40 PM PDT

    •  I think you're right.

      We should look at building a future on current technology with the assumption that no magic technology is coming down the pipeline.  That means, electric trains and streetcars, everywhere.  Save that oil for agriculture so we can eat.  

      Electric trains can move people and freight much more efficiently than autonomous vehicles.  And electrified ones can work off any source of electricity.  PV, CSP, wind, geotherm, nuclear, tidal, wave, whatever the source, it doesn't matter.  You'll have transportation.  

      by Arclite on Wed Mar 12, 2008 at 12:19:43 AM PDT