Peak Oil
According to Colin J Campbell, on page 53 of The Oil Coming Crisis (Multi-Science Publishing, 2004), oil prices hovered around $2 per barrel for most of the twentieth century until the 1973 Yom Kippur war.
Think of what this means.
We built our current economy and civilization on oil at $2 per barrel and now:
<> forty percent of our energy comes from oil,
<> ten calories of oil are needed to produce and deliver each calorie of food,
<> the world's 600 million automobiles, 15,000 commerical jets, and 90,000 commercial ships all run on oil and nothing else,
<> and oil is needed to make the half the world's fertilizers, the asphal covering our roads, our rubber tires, and 500,000 other products that we use daily including plastics, vinyl, nylon, pesticides, medicines, .
And now oil costs $60 per barrel, thirty times more than it cost when we were building this civilization and economy, and it is getting more expensive every day.
Can you imagine anything other than a worldwide crash?
Do you see anyone doing anything to prepare for it?
Is this insane or am I?
Bill Totten http://www.ashisuto.co.jp/english/
Think of what this means.
We built our current economy and civilization on oil at $2 per barrel and now:
<> forty percent of our energy comes from oil,
<> ten calories of oil are needed to produce and deliver each calorie of food,
<> the world's 600 million automobiles, 15,000 commerical jets, and 90,000 commercial ships all run on oil and nothing else,
<> and oil is needed to make the half the world's fertilizers, the asphal covering our roads, our rubber tires, and 500,000 other products that we use daily including plastics, vinyl, nylon, pesticides, medicines, .
And now oil costs $60 per barrel, thirty times more than it cost when we were building this civilization and economy, and it is getting more expensive every day.
Can you imagine anything other than a worldwide crash?
Do you see anyone doing anything to prepare for it?
Is this insane or am I?
Bill Totten http://www.ashisuto.co.jp/english/
posted by Bill Totten at
7:22 PM
2 Comments:
When discussing "The" price of oil, we mean the price in a tanker ready to land at some central point in the world market. It takes varying degrees of human effort to present this homogenous barrel to the world. Hence a uniform world market price represents a large variety of prices at the wellhead, and an even larger variety at the well-foot, or "in situ."
In 1970, with oil at $2/bbl, at various places out in the boonies, and at great depths, and in the bypassed cracks and crevices of commercial fields, there was oil whose value in the ground (in situ) hovered around zero - it was "marginal". With oil at $60/bbl, that once-marginal oil is now worth $58/bbl. The rate of increase in its value, starting from zero, has been infinite.
To secure such returns, oil firms and their allied politicians and military have been scouring the earth for a long time past to gain control (before those greedy other fellows get there first). Economists, in their dull and staid way, call this "rent-seeking," but "racing" is more like it. It costs lots of money, private and public. It's come to dominate world politics.
Anyway, re your current blog, the rise of price of oil in situ is much greater than the 30x rise of delivered oil.
For years, resource optimists cited the stable price of delivered oil to disguise the growing price and scarcity of in situ oil. Notorious examples were The Paley Commission Report, and "Resources in America's Future," and a book by Barnett and Morse, based on same, both sponsored by a Washington think tank, Resources for the Future - whose founding and Ford funding were sequels to the Paley Report. (I once worked there, until my questioning of the above works made me persona non grata.)
It somewhat fortifies your case, I believe, to look at the rise in price of in situ oil. This is a truer measure of growing scarcity.
At the same time, your doom forecast may somewhat understate the flexibility and adaptability of mankind, once firmly rubbed in the face with the undeniable fact of higher prices. That is, so long as we have enough foresight to avoid getting caught in irreversible economic "traps," such as you envision. If it takes generating a shock effect - doom scenario and panic - to achieve that goal, it is justifiable and socially useful. After all, the other side has lied credulous mankind into this mess, a little reverse medicine may be needed to get their attention.
By
Anonymous, at 9:10 PM, July 09, 2005
Thanks very much, Mason. As always, your analysis is deeper and broader than mine.
What really worries me is that we've built our global economy of mass production, mass consumption, and mass disposal - as well as our industrial system of producing and delivering food - on the presumption of abundant and cheap oil ($2 or less per barrel). Can those systems continue to work on scarce and expensive oil (now $60 per barrel, Goldman Sachs predicting $100 this year)?
I may be understating "the flexibility and adaptability of mankind" but I've read hundreds of articles and several books on this issue during the past year and I cannot see any prospect for either (1) finding significantly more oil, or (2) finding an alternative energy as abundant and cheap as we've enjoyed since we began pumping oil about 150 years ago. I've examined natural gas, coal, nuclear, wind, solar, hydro, hydrogen, methane hydrate, and the claims that "technology" can produce something from nothing, and I see nothing other than the need to get used to having less energy to produce, consume and do less - and do that less more locally at a slower pace.
Bill
By
Bill Totten, at 12:43 PM, July 10, 2005
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