Erica Etelson

Sunday, August 26, 2007

When Hurricane Katrina struck two years ago, Americans learned just how ill-equipped the government is to respond effectively to natural disasters. But if you think the government's response to Katrina was inept, brace yourself for peak oil.

Global oil production will hit its peak in the next few years, at which point oil prices will skyrocket and voracious consumers like the United States, China and Europe will quickly drain every last barrel they can afford to buy. Our per-capita oil consumption is double that of most European nations and more than triple Mexico's, and shows no sign of slowing. As supplies dwindle, an economic disaster on a par with Katrina will start to unfold.

Global oil demand is at 84 million barrels a day and rising, and there are at most a trillion barrels' worth still in the ground, most of which is very difficult and expensive to recover. Do the math, and you'll see that the end of oil is, at most, 30 years away.

But long before oil actually runs out, economists and energy analysts warn that extreme scarcity will cause prices to soar so high that it will no longer be feasible to use petroleum on a wide scale. It is the imminence of this supply-demand shortfall that has people like National Petroleum Council member Matthew Simmons and Reps. Roscoe Bartlett, R-Md., and Tom Udall, D-N.M., worried - very worried - about our economy's ability to withstand the end of oil.

Cheap and plentiful oil is the foundation of our economy. Everything from food production and distribution to the manufacture of clothing, footwear, medications and plastic goods relies heavily on petroleum. You name it, and we need oil to produce it, ship it and, in many cases, run it.

In February, the U.S. Government Accountability Office dropped a quiet little bombshell: a report on peak oil concluding that there is an urgent need for a swift, coordinated government strategy to assess and develop alternative energy technologies to avert "severe economic damage."

The agency concluded: "(T)he United States, as the largest consumer of oil and one of the nations most heavily dependent on oil for transportation, may be especially vulnerable among the industrialized nations of the world." Stark though its conclusion is, the GAO may in fact be understating the gravity of the situation.

The report followed on the heels of a 2005 peak oil risk management report commissioned by the Department of Energy, which warned of the "extremely damaging" and "chaotic" impacts that will ensue if "intensive," "aggressive" and "expensive" mitigation measures are not put in place at least 10 years ahead of time. Both reports landed with a dull thud and have been dutifully ignored. In other words, there is no Plan B.

Depending on whom you ask, the impacts of peak oil range from dire to catastrophic: At best, get ready for a crippling recession and widespread inflation. At worst, we face severe global food shortages that threaten wide-scale starvation and an overall breakdown of social and economic institutions. And if history is any guide, we can expect a series of military invasions into every remaining oil hot spot in the world - invasions that may, by the way, require even more fossil fuels than we could possibly expropriate by force.

Because oil companies and OPEC nations are notorious for overstating their reserves to manipulate the market, it is impossible to predict when exactly the world will start feeling the crunch. As award-winning New York Times reporter Peter Maas wrote in 2005, "Because we do not know when a supply-demand shortfall might arrive, we do not know when to begin preparing for it, so as to soften its impact; the economic blow may come as a sledgehammer from the darkness."

But here's a little hint: Crude oil futures hit an all-time high of $78.21 per barrel on July 31. Prices cannot go much higher without us beginning to feel the foreshocks of a peak oil catastrophe. Oh, and by the way, natural gas (which provides 42 percent of California's power) is running out, too. One day, even coal will be gone. How much longer are we going to wait before we figure out how to survive without fossil fuels?

The United States has reacted to the threat of peak oil and gas with all the alacrity of its response to climate change. It is ignoring the looming crisis for as long as it can, just waiting for that sledgehammer to land its first blow. Eventually, when a recession hits, tax revenue will plummet, and the government will have nowhere near the money it needs to build an alternative energy and transportation infrastructure. Every year that goes by without an intensive mobilization to build an oil-independent economy diminishes our odds of surviving the end of oil.

States, too, seem to have their heads in the sand. California, considered a leader in efforts to reduce carbon emissions, just cut funding for mass transit by $1.3 billion for the fiscal year. Like most states, it ignores the urgent need to build a transportation network that does not rely on fossil fuels.

At this point, you might be asking yourself: When oil becomes scarce, how will I get food? That's a very good question. Here are a few more: Will my garbage get picked up? How will my water district purify and deliver water and treat sewage without petrochemicals? What if I need an ambulance? What if my home is one of the 7.7 million that rely on oil for heating? Which of my medications are made out of petrochemicals? How will I get to work? Will I even have a job anymore?

But don't just ask yourself. Ask your elected officials, your public utility district and your grocer. Ask the U.S. Postal Service, Federal Express and American Airlines. Ask GM. If you have one, ask your financial adviser or stockbroker which companies will still be in business after peak oil hits. Odds are, he or she will give you a blank stare.

While the United States blindly carries on with business as usual, countries such as Sweden, Iceland and Ireland are taking steps to assess and mitigate peak oil impacts. Oil-rich Iran has begun rationing and has already cut oil consumption by 25 percent. But here at home, demand for oil is ever on the rise, and there is no talk of conserving reserves for essential goods and services or to develop an alternative energy infrastructure.

Instead, we are on course to squander every last drop on long solo commutes, leisure travel, mountains of plastic junk and the senseless transglobal shipment of unsustainably grown food.

That's where local government comes in. Small but growing numbers of municipalities are initiating a process that federal and state leaders should have begun 30 years ago, when domestic oil reserves peaked. They are, in short, figuring out Plan B.

In May, Oakland appointed an Oil Independent Oakland by 2020 Task Force. In June 2006, Portland, Ore., formed its own Peak Oil Task Force, which got busy fast: By March of this year, it had released its first major report, urging the city to "act big, act now," even without further study or analysis. The report prompted the city to pass a resolution to accelerate oil and gas conservation measures to halve Portland's fossil fuel consumption.

Last year, San Francisco passed a resolution to assess the city's vulnerability to oil depletion and to develop a transition plan. Other cities, from Austin, Texas, to Bloomington, Ind., are confronting the stark reality and trying their best to figure out how to soften the blow.

Cities are looking at options such as local food cultivation, urban redesign to minimize transportation needs, locally controlled electricity, rainwater catchment systems (to ensure local access to water for food cultivation), energy-efficient mass transit, and the preparation of emergency plans for sudden and severe food, water and energy shortages. They are embracing bio-regional sustainability - a concept once dismissed as an ecotopian fantasy that is suddenly starting to look like our last best hope.

But cities cannot solve the peak oil problem on their own. They don't have the revenue needed to build light-rail networks and wind farms or to store massive grain reserves. During a recession, they will be in no position to guarantee income supports for millions of laid-off workers. But the more they do now, while they still have a revenue stream, the better off their residents will be.

If the peak oil doomsday scenarios are to be averted, it will require coordinated action at every level of government, by every sector of the economy and by every community and citizen in the nation. We are heading into a political era in which the need to come together to invent and support life-sustaining social and economic systems will trump all else.

Some tout alternative energy technologies as the silver bullet that will save us from a peak oil crisis. But there is a broad consensus among energy analysts that it will be decades before such alternatives are available for wide-scale implementation. Moreover, some of the alternatives with the strongest political backing, including ethanol and liquefied coal, may cause even more severe global warming than petroleum has.

The United States needs to slam the brakes on fossil fuel consumption. As if arresting climate change weren't enough of a reason for immediate and strong conservation measures, the end of oil may just force upon Americans a reality we have ignored for far too long: We cannot go on like this, pedal to the metal, asleep at the wheel.

Erica Etelson is a Berkeley journalist, former environmental attorney and oil independence activist. Contact her at oilindependence@yahoo.com.

What Happens When Demand for Oil Outstrips Supply?

... and There's No 'Plan B' 

OIL APOCALYPSE A New Documentary from Filmmaker Martin Kent
LOS ANGELES, Nov. 7 /PRNewswire/ -- This week, the price of crude oil is
trading at a shocking $96 a barrel. By year's end, analysts predict petroleum
will reach $100.  And it's not going to stop there. The world we've created runs
on oil. But energy experts say the world is running out of oil much faster than
previously thought. Demand will continue to outpace supplies, shortages are
inevitable, and the price will only continue to rise dramatically --
causing a ripple effect of disastrous economic, social and political
consequences. 

On Tuesday night, November 13th, (at 11 p.m. EST/PST - 10 p.m. CST),
the History Channel will present Megadisasters: Oil Apocalypse, a documentary
that Los Angeles-based filmmaker Martin Kent is calling "a wake up call," about
the world's energy crisis. "We can no longer count on getting all the gasoline
we need -- and there's no plan B." 

By "plan B," Kent is referring to a coordinated system of alternative energies laid
out in his film, that could replace our addiction and dependence on oil, if society
mobilizes quickly to make it happen. 

It's long been known that oil is a finite, non-renewable resource, that pollutes
the environment, and now mankind is coming to realize that it is also most
likely causing climate change. With China and India rapidly industrializing,
creating an energy-hungry middle class, demand for oil will increase from the
world's current consumption of 84 million barrels a day, to 100 million barrels
within the next 5 years. 

Unfortunately, while oil producers and refiners are scrambling to develop
new techniques and sources of production, as yet there are no sure means
to meet the growing demand. 

Oil Apocalypse presents a terrifying set of scenarios. True to the laws of supply
and demand, we are fast approaching the breaking point, when the imbalance
could destabilize the economies and infrastructures of virtually every nation
on the planet. 

The worst-case scenario, say experts in the film, is a worldwide depression,
which could lead to a world war. Still, they say it's not too late. But we have
to act fast. Says Kent: "My hope is that upon seeing this film, everyone will be
inspired to become an energy activist -- instead of sitting back and hoping that
the scientists and leaders will somehow pull everything together and fix this in
the eleventh hour.  The time to act is now." 

Energy experts appearing on camera in Oil Apocalypse include authors
Richard Heinberg, Matthew Simmons, David Goodstein, Kenneth Deffeyes,
Michael Economides and Christine Woodside; Oppenheimer energy analyst
Fadel Gheit, PFC Energy chairman J. Robinson West, RAND Corp.'s
James Bartis and U.S. Congressman Roscoe Bartlett. Megadisasters:
Oil Apocalypse is a Creative Differences, Inc. production. 

website: http://www.martinkentproductions.com

Courtesy of the Rocky Mountain News

Much higher oil prices seen in U.S. future

Peak oil expert says coping will be hard

Ken Papaleo © The Rocky

Steve Andrews of the Association for the Study of Peak Oil & Gas-USA

·                             Much higher oil prices seen in U.S. future

·                             Oil hits record of $97 per barrel

·                             $3-a-gallon gas returns

By Roger Fillion, Rocky Mountain News
November 7, 2007

Steve Andrews is betting the jump in oil prices is far from over.

He's convinced oil prices are headed much higher because global
oil output is at or near its maximum peak, if it hasn't already peaked.

As co-founder and acting executive director of the Denver-based
Association for the Study of Peak Oil-USA, Andrews is winning converts.

His group is the U.S. branch of a global organization. Peak oil proponents
include geologists, physicists, oil industry consultants and environmental
activists.

Demand for transportation fuels such as gasoline and jet fuel, as well as
other fuels, will keep growing, according to the peak oil view, pushing oil
prices higher as oil output heads lower over time.

Prominent dissenters from this view include Exxon Mobil and the U.S.
Energy Information Agency.

Andrews spoke with the Rocky about these issues:

Do you think world oil output has peaked?

It's possible. I would put the odds at 30 percent or so that we've already
hit our peak. There's a good chance that within the next five years we
could produce a bit more. Right now the world is producing 85 million
barrels of oil a day.

How will we know if output has peaked?

Back in 1970 U.S. oil production peaked. For two full years after that,
the oil industry's main trade publication assumed production would
increase - when in fact production fell slightly. It will only be clear in
the rear-view mirror.

What does it mean for oil prices?

Last week, Sadad Al-Husseini - a former executive at Saudi Arabia's
national oil company, Aramco - said at a conference in London that
world oil production was flat and was likely to remain so for a long time.
He said that currently the technical floor for oil prices is around $70,
and that floor was likely to increase by $12 a year for the foreseeable
future. ASPO-USA believes that's a likely type of scenario for us. There
will still be volatility going forward, with no cap on the high side but a
steadily rising floor on the low side.

What are the implications of peak oil for U.S. consumers and
business?

We've been blessed with relatively low oil prices for decades and
virtually always have had plentiful supplies. Both of those situations
are likely to change for the worst. We've already seen some spot
shortages, including in North Dakota and back East. And this was
without a hurricane or anything like that.

Spot shortages are likely to become more frequent in about five years.
The only way to make up the gap between shortages and strong
demand is higher prices.

How can people prepare?

At the individual level it's going to really make sense to live closer
to work so you have more travel options, such as carpooling.
Bicycling will fit in. Some people will likely switch to motorcycles
and motorbikes. That will probably be in about five or 10 years.
And people will rely more on mass transit such as buses and
light rail. People will be creative.

Can nuclear or renewable energy fix matters?

Our transportation problem is a liquid fuels problem, not an energy
problem per se. Increasing electricity supply from any source -
renewable or nonrenewable energy such as nuclear - is not going to
help us diversify away from oil. In the U.S., 70 percent of our oil goes
to transportation. Very little of our transportation system is run on
electricity. In Denver, only light rail runs on electricity.

Is Europe better prepared than the U.S.?

Europe is much better prepared for a shortage in transportation fuels.
Their availability of mass transit is much higher. Their population
density means it's much easier to get from point A to point B
using mass transit or even biking and walking.

Is there any solution to the peak oil scenario?

We don't use the word solution because it implies a silver bullet that's
not out there. The transition to come is likely to be protracted and rather
painful. We use the phrase silver BBs instead of silver bullets because
there will be lots of intelligent responses that people, businesses and
cities can make.

How have you adapted to peak oil?

My wife and I have our primary residence in Westcliffe, about an hour
west of Pueblo in the Wet Mountains. We built an off-grid house, not
really for peak oil but because of where we live. We built a house that
uses very little energy and we get most of our energy from the sun and
wind. We drive a Prius.

Is there anything positive you can say?

We can be creative in our responses. But it will take individual and
community responses to a degree we've not seen in this country
since World War II.

fillionr@RockyMountainNews.com or 303-954-2467