Bill Totten's Weblog

Thursday, April 19, 2007

Spring Break

by Jim Kunstler

Clusterfuck Nation (April 09 2007)

Comment on current events by the author of "The Long Emergency" (also on

Last week, I was in Illinois walking the majestic Beaux Arts-vintage main quad of the State U in Champaign-Urbana. The flowering trees were in full bloom, the grass was green and speckled with dandelions, and the leaves on the privet hedges were unfurling. Then I came home to upstate New York where everything is brown, gray, and dead-looking, and humps of snow still remain on the north side of every building. I called the heating oil man to get 100 gallons because our tank was close to running on fumes and the daily high temperature lingered in the thirties.

This is the flip side of the abnormally warm early winter we had. The jet stream, for whatever reason, has pulled a flag of frigid air over the northeast US, the region which proportionately uses the most oil for home heating, as opposed to natural gas. The weather forecast says they see frigid days and nights as far ahead as they dare to look.

Gasoline use typically shoots up around this time of year as spring breakers hit the road. Meanwhile, US Department of Energy's EIA reports that US refinery inputs are 115,000 barrels a day short of their fifteen million barrels a day "threshold" (which I take to mean their required capacity to keep things humming), while imported gasoline supplies (we get some of that, too) also fell short. The EIA's monthly report concludes: "... consequently, as gasoline demand began to grow in earnest in April, gasoline supply has failed to keep pace, resulting in continued significant stock declines and sharp upward pressure on gasoline prices in recent weeks". Gasoline prices are now 11.9 cents per gallon higher than at this time last year.

The EIA has to be more reality-based about current activity than their future projections, because the current import-export and refinery figures are out there for other people and other data-gathering organizations to see. The EIA's future projections are a joke. They are based on the fantasy that everything will be okay despite what we see happening now. The EIA projects that all the world's oil producers will increase their oil production hugely by 2030. They see Saudi Arabia shooting up to 17.1 million barrels a day when, in fact, Saudi production fell seven percent just over the past year alone to 8.4 million barrels a day. They see Mexico shooting way up, despite the announcement last year by Pemex that the Cantarell field (sixty percent of Mexico's total production) is crashing at a minimum rate of fifteen percent a year. They see Russia zooming way up, despite the fact that Russia is probably past the seventy percent mark of its original total reserves. If you go to this EIA chart, you'll see practically everybody's production shooting way up in the decades ahead, even the US, which, in reality, has seen nothing but steady annual decline for more than thirty years (we produce half now of what we did in 1970).

The EIA is a perfect reflection of the public it serves. It appears to conduct daily business in a responsible way while it resolutely refuses to face the obvious realities of the future. My own town is a good example of non-reality-based planning. Our mayor announced last week that we are going to construct a 1500-space parking structure to go along with an expansion of our minor-league convention center, all based on money raised through bonds. I can't imagine a worse investment. The last thing this town will see in the years ahead is an increase in motor-oriented tourism. And the last thing that business organizations will spend their money on in a future of energy scarcity and diminished revenues will be trade shows.

The price of gasoline seems to be the only signal that the American public receives on its collective walkie-talkie. It looks to me as though gasoline prices will head close to the $4-a-gallon range in some parts of the country this summer. When that happens, the US government, as represented by the DOE's reporting agency (EIA) will not have a coherent story for the public. I imagine as this occurs, the new Democratic-controlled congress will call for hearings to investigate US oil companies. They'll haul in the executives from Exxon-Mobil and the rest of the bunch and threaten them with a punishing windfall profits tax. I wonder if the oil company chieftains will tell the politicians the truth: that peak oil is for real and it's here.

Bill Totten


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