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A few words on the future of oil
Image"The end of oil shall be the big test for the world on all fronts…and can lead us to a better understanding of our selves as individuals and groups, our planet, indeed, human existence. Or it can all fall apart…" A "memo" to the reader from Benjamin Marcus (24, USA).
By Benjamin Marcus
Edited and published by Thinking-East.Net
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Date published: 27/03/05
Section: Themes / Middle East
1,655 words 
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Memorandum

To: The reader
From: A concerned fellow citizen of our world
Re: The future of "peak oil"

The situation is getting worse daily

This week in oil: March 13th-19th, 2005

1. OPEC (Organization of the Petroleum Exporting Countries) announced that they are opening the taps, and producing oil at full capacity to keep up with demand, and to combat rising oil prices. It didn't work, because…

2. oil prices hit record highs this week: "OPEC has done all it can do," said Qatar Oil Minister Abdullah al-Attiyah, "This is out of the control of OPEC." [i]

3. In response, the United States Senate voted to include drilling in the ANWR (Arctic National Wildlife Refuge), the last untouched land in the country, in the (FY) 206 budget resolution. [ii]

Part of a larger problem

This problem, known as "peak oil,” occurs when production can no longer keep up with demand. The "peak" will be more like a plateau, taking place over a few years. No one will know it has hit until production begins its terminal decline. The projections for when peak oil will occur come sooner and sooner each month, with experts fearing it happening as soon as 2006 - as you will find in the quotes below [see Evidence.]

Consider:

1. most non-OPEC countries have, are, or will peak within a few years;

2. over 80 million barrels are being consumed every day (mbd), with an increase in demand of 2 mbd this year (>2%) [iii];

3. ten years from now, ceribus paribus [if all things remain constant], demand will be 80% higher than today.

The future

Due to diminishing resources, the world will of necessity use less oil than it does now in the near future. This development can happen in an evolutionary or revolutionary manner, with the former meaning less death, destruction, catastrophe, and pain. Spreading the word is the first step in facilitating a civilized transition. Fast or slow, the transition will be marked by three actions already taking place, and may be, indeed probably will be, prioritized in this order:

1. Use of force and sidelining of public, human, and environmental rights and concerns to get the last "cheap" drop;

2. reduced use-demand side management;

3. finally, a switch to other, hopefully more renewable fuels.

The end of oil shall be the big test for the world on all fronts - political, civil, scientific, strategic, spiritual - and can lead us to a better understanding of our selves as individuals and groups, our planet, indeed, human existence.

Or it can all fall apart…

Evidence


The following quotes are presented in bullet form for the purpose of including a variety of sources while maintaining brevity. All quotes are referenced, and most include direct hyperlinks if you would like more information.

Image

Oil-Graph. Click here

· Energy advisor to President Bush, Matt Simmons: "'The increased knowledge of what’s really going on in the energy business versus the perception of what we thought was going on will help people understand that we need to get used to high energy prices and that $40 per barrel oil is not dangerous, what’s dangerous, is $40 per barrel oil being too cheap…They [Saudi Arabia] may already have peaked in their ability to grow oil production, and if that’s so, the world has peaked, as well.'" [Excerpted from, "Simmons Hopes He's Wrong," Petroleum News Vol. 9, No. 31, week of August 01, 2004. My italics.]

Simmons believes that $182 per barrel is a realistic price (approx. $7/gallon of gas): "Is the world's oil running out fast?" [Excerpted from BBC News June 7, 2004. Click here. Also, view his recent speeches on his oil investment company's website.]

· OPEC: "OPEC’s acting secretary general Adnan Shehab-Eldin told Kuwait’s Al-Qabas newspaper that he sees the possibility - if not the probability - of oil hitting $80 a barrel within the next two years." [Excerpted from, "OPEC: $80/Barrel Possible," Green Car Congress, March 3, 2005. Click here.]

· Kuwait Petroleum Corp's chief executive Hani Hussain: "'Prices will never [again] go under the $40 per barrel mark…'" [Excerpted from, "Era of cheap oil over, says Kuwait official," Gulf News March 13, 2005. Click here.]

· BP Statistical Review of World Energy: "18 countries producing 29% of world supply have past their peak, their combined output has dropped over 1 million barrels per day since 2003." [From the Institute of Science in Society's website.]

· President of Russian pipeline monopoly Transneft: "'Beyond 2005 [Russia] will probably reach the ceiling in output. The period of easy oil extraction is over.'" [Excerpted from, "Oil: Prices ease as dealers eye US supply build," The New Zealand Herald, Feb 16, 2005. Click here.]

· Pemex: "Pemex, the third-largest producer of crude in the world, who provides 16% of the imports to the US, said it expects production at its Cantarell oil field (the largest oil field in Mexico, and the eighth largest in the world) to begin declining [by 5%] this year, earlier than previously forecast… [and its decline] will be more sudden and dramatic than expected." [Excerpted from, "Mexico’s Largest Oil Field in Premature Decline," Green Car Congress, March 1, 2005. Click here.]

· Ex. Texaco exploration geologist, advisor to and/or commissioned by Amoco, Shell, Mobil, Esso, etc., Colin Campbell believes that world oil production will peak in 2008. [See graph below. Click here.]

· Senior expert at National Iranian Oil Company, Ali Samsam Baktiari believes that it will peak, "most probably in this decade." [Click here, and then on, "A Middle East View."]

· BP exploration consultant Frances Harper "estimates oil production peaking between 2010 and 2020." [Excerpted from, "Oil supply to peak sooner than we think, says BP scientist," The Business Nov. 7, 2004.]

· ExxonMobile’s president of Exploration Jon Thompson: "'By 2015, we will need to find, develop and produce a volume of new oil and gas that is equal to eight out of every 10 barrels being produced today.'" [Excerpted from The Lamp, 2003. Click here.]

Image

Ramifications

· From a report commissioned by the United States Department of Energy (USDOE):

 a. "'the economic loss to the United States [due to oil production peaking] could be measured on a trillion-dollar scale...Expediency may require major changes to ... lengthy environmental reviews and lengthy public involvement'...the authors believe "20 years is enough time to limit damage from any peak. However, they point out that 'if mitigation were to be too little, too late, world supply/demand balance will be achieved through massive demand destruction…'"

b. "…which would create a long period of significant economic hardship worldwide."

[(a) excerpted from, "US Report Acknowledges Peak-Oil Threat," Al Jazeera, March 9, 2005, and (b) excerpted from ASPO's March Newsletter. Al Jazeera here. ASPO here.]

· "In addition to transportation, food, water, and modern medicine, mass quantities of oil are required for all plastics, the manufacturing of computers and communications devices, extraction of key resources such as copper, silver, and platinum, and even the research, development, and construction of alternative energy sources like solar panels, windmills, and nuclear power plants." [Life After the Oil Crash p.10 Click here.]

· The following is an excerpt from a Newsweek Magazine interview with prominent physicist, David Goodstein:

Newsweek : You write that the crisis doesn’t happen when we run out of oil, it happens when we reach the peak, the halfway point. Explain that.
Goodstein: We had a peak once before—it was in 1973. The production in North American had reached its peak in 1970 and was declining. Supplies were not available in North America and the Arab countries embargoed the oil; they shut down the pipeline. We had an immediate, instantaneous panic, mile-long lines at gas stations and fear for the future of our way of life. That was an artificial, temporary peak. And it’s just a slight foretaste of what will happen when we reach the real [global] peak and supplies start to decline and continue to decline forever.

[Excerpted from, "Crude Awakening," Newsweek, Feb. 17, 2004. Click here.]

And a few words on the future of electricity…

Energy Ventures Group LLC. founder, Andrew Weissman: [iv] "It's about as serious a problem as you can imagine," Weissman told a mining industry convention crowd, adding that electric power prices could double or triple within three to four years [location not specified]. In a worst-case scenario, that price surge could materialize in 12 to 18 months."[Excerpted from, "Outlook Shaky for Supply of Natural Gas" In Business Las Vegas March 11-17, 2005. Click here] The International Energy Agency's (IEA) 2002 World Energy Outlook Reference states that, based on present policies, worldwide electricity generation, transmission, and distribution will cost $10.8 trillion (2004 USD) between now and 2030. Meanwhile, CO2 will increase by 70%. ["Critical Thinking About Energy" Skeptical Inquirer Jan./Feb. 2005.]

Conclusion

The USDOE report claims that, "Initiating crash program mitigation...the fastest possible implementation – the best case [In practical terms, real-world action is certain to be slower]...20 years before peaking offers the possibility of avoiding a world liquid fuels shortfall for the forecast period," and that, "Without timely mitigation, world supply/demand balance will be achieved through massive demand destruction [shortages], accompanied by huge oil price increases, both of which would create a long period of significant economic hardship worldwide." [Excerpted from ASPO March Newsletter referenced above.]

The other evidence I've compiled strongly suggests that we have substantially less than 20 years before that happens. The report, based on available information, appears to have used US Geological Survey studies regarding peak oil, which estimate a peak in the year 2030. This report has been discredited [See here.] The USGS report was created for political reasons, especially to not cause panic, which would just make the situation worse. Therefore, information, such that I provide, can only be distributed through independent sources...

I appreciate your time and attention.




Endnotes

About the author: Benjamin Marcus recently graduated cum laude from Arizona State University with a Bachelor's in English Literature (major) and Spanish (minor.) He has since become a researcher and lobbyist for ETA Engineering, a small Southwest American company interested in developing and distributing renewable energy products and services worldwide.

Author's note: Although oil concerns are being publicized daily, people are not as well informed as they should be, especially considering the implications for the future. Being that there is more "sense of security" coming naturally from people on this issue than there should be, I didn't feel it appropriate referencing any source re-enforcing it.

[i] “OPEC says it has lost control of oil prices: Cartel producers say they can't keep up with strong global demand” MSNBC March 16, 2005. here or http://msnbc.msn.com/id/7190109/

[ii]"51-49 Senate Vote Backs Arctic Oil Drilling" Washington Post March 17, 2005. here or http://www.washingtonpost.com/wp-dyn/
articles/A40670-2005Mar16.html

[iii] MSNBC, March 16th, 2005.

[iv] Click here for more information about Mr. Weismann.

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