Sunday, July 30, 2006

Peak Oil News

A tank of gas, a world of trouble

An incredible new series by the Chicago Tribune and journalist Paul Salopek who should get more awards for this.

Chicago Tribune - Part 1:
"I truly think we're at one of those turning points where the future's looking so ugly nobody wants to face it," said Matthew Simmons, an energy investment banker in Houston who has advised the Bush administration on oil policy. "We're not talking some temporary Arab embargo anymore. We're not talking your father's energy crisis."

What Simmons and many other experts are talking about is a bleak new collision between geology and geopolitics.

Below ground, the biggest worry is "peak oil"--the notion that the world's total petroleum endowment is approaching the half-empty mark, a geological tipping point beyond which no amount of extra pumping will revive fading oil fields. Peak oil theory is controversial. Many think it alarmist. Yet even Big Oil is starting to gird itself for possible fuel shortages: Chevron, the nation's second-largest oil company, has bluntly declared that "the era of easy oil is over" and is warning energy-hungry Americans that "the world consumes two barrels of oil for every barrel discovered."

Aboveground, things look little better. Most of the world's petro-states, aware that crude supplies are growing increasingly valuable, have limited drilling rights to their own oil companies.
This story is huge and should be an award winning series that started when they decided to trace where Chicago's oil is coming from.
After guidance from international energy analysts, oil tanker shipping firms, trucking companies and harbor masters on two continents--not to mention logistical help from African chieftains, Venezuelan dissidents and a British security company--Salopek and photographer Kuni Takahashi traveled to the distant sources of the South Elgin Marathon's gas.

In this way, they dispelled a well-guarded oil industry myth, and did what had never been done before.
A world of insights in this series. From Part 2:
Americans already get more oil from Africa than from Saudi Arabia. By 2015, oil experts say, African states will supply a quarter of all U.S. imports, up from 15 percent today. The United States quietly signaled this shift in 2002, when the State Department declared African oil a "strategic national interest," meaning in diplomatic code that U.S. troops may intervene to protect it.
From Part 3:
What are the hidden costs of America's imported oil? The answer is complex. It may ultimately be unknowable. But this hasn't daunted the likes of Milton Copulos.

A tenacious economist with the National Defense Council Foundation--a right-of-center Washington think tank--Copulos spent 18 solid months poring over hundreds of thousands of pages of government documents, toiling to fix a price tag on America's addiction to global crude. He parsed oil-related defense spending in the Middle East. He calculated U.S. jobs and investments lost to steep crude prices. He even factored in the lifelong medical bills of some 18,000 U.S. troops wounded in Iraq as of March. (About $1.5 million each.)

Copulos is a highly respected analyst in Washington. And his exhaustive findings flabbergasted the Senate Foreign Relations Committee this spring.

The actual cost of gasoline refined from imported oil, according to Copulos?

Eight dollars a gallon.

When he isolated the hidden costs of Middle Eastern crude in particular, the price jumped to $11. This included a war premium that swelled the Pentagon's spending to protect all Persian Gulf oil to $137 billion a year....

Iraqi output still sags far below prewar levels despite a recent allocation of $1.7 billion in U.S. taxpayer money to patch up Iraq's decrepit oil fields.
From Part 4:
Oil companies are not usually in the business of altruism, but Petroleos de Venezuela S.A., the state energy firm known by its abbreviation, PDVSA, isn't your usual oil giant.

Dismantled by Chavez after a crippling worker strike in late 2002 and early 2003, PDVSA has been reborn as the central engine of Chavez's socialist revolution. The strongman fired 19,000 employees and replaced them with party loyalists. And now the company is spending $8 billion of its annual profits on social programs: a staggering $310 worth of assistance for every man, woman and child in Venezuela.

"This is a good way to run an oil company into the ground," said a skeptical Michelle Billig, an analyst with PIRA Energy Group in Washington. "On the other hand, if leaders in places like Nigeria, Angola and even Iraq ever tried a bit of this, we probably wouldn't be hearing so much about instability in their countries."....

Venezuela may harbor the richest oil prize on the planet....

"America and China are on a collision course over what remains of the world's hydrocarbons," said Gal Luft, a China expert with the Institute for the Analysis of Global Security in Washington. "The 21st Century is going to be defined by this aggressive competition for a resource that's depleting."....

And if peak oil theorists are right, and the Marathon survives its 35-year structural life span, then it will be among the last filling stations dispensing gasoline in the world.
Peak oil theory takes center stage. The most salient fact in this section is that the US Geological Survey presently pegs "Peak Oil" in 2044, instead of already past. Saudi Arabia is also declining rapidly in oil reserves and has greatly overstated what remains, some of that covered in this section.

The series even touches a bit on the controversy of what is oil.

In reading this I noticed this was the type of story the Houston Chronicle should do, if the publishers wanted an informative newspaper.

This is also supported by an online video that covers much of the same ground.

The Countdown for the Peak of Oil Production has Begun – but what are the Views of the Most Important International Energy Agencies? The foundation of their misleading claims are the US Geological Survey. The projections presented by USGS, EIA and IEA regarding the future availability of oil are purely comforting tales not based on valid arguments.

This was recommended by Texas State Rep. candidate Janette Sexton.

Tags: ,

No comments: