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Peak Oil?

Bastian Gross

German Mathquant
Thanks Woody,

To my way of thinking ecological problems are not only on the world energy resources but also on energy consumption. So the issue is energy savings.
 
Indeed, Energy conservation is easier and more beneficial. Plus, since non-renewable energy will not last forever, simply increasing supply is not a lasting option. And if we want it to last longer (maybe while we're figuring out what to replace it with) we will have to conserve.

I'd say the days of cheap oil are behind us. When oil prices shot up in the late seventies, there was a push toward more fuel efficient small cars and there was talk of investing in alternative energy sources. Oil producing countries increased production to make oil cheap and we forgot all about conservation. If peak oil is somewhere around 2008-15, the same can't happen again and oil will just keep going up (higher demand, lower supply... don't need an econ degree for that one).

BTW, I've been telling people how embarrassing these car commercials are where they brag about having 5 models that get 30+ mpg. Hell, my '84 dodge got 30 mpg. Big friggin' deal. We couldn't improve that in 24 years? Weak.
 

DominiConnor

Quant Headhunter
Woody has a point, and mostly that has been consumer preference. Improvements in technology have mostly been swallowed by choosing to drag around more metal.

Although buying a better made European or Japanese car makes sense for the individual, let us not think it makes any useful difference to the overall outcome.

The US consumes about 25% of global energy production. About 10% of that is transport, so a rough estimate is 2.5% of the total goes on US cars. Moving to European/Japanese cars overnight might halve this. That's 1-1.5%
Look at the way energy consumption is growing and you see that buys the world a few months. Anyone here reckon that delaying the oil running out or climate change by 6 months will make any real difference ?

Conservation is a useful thing, but it's only going to buy us a very little time. The way out is technology, big technology, lots of it. Nuclear, orbital solar (not the panels dumb green put on their houses), and some windmills. Give it 20/30 years and genetic modification might make biofuels rational, but for now biofuels are burning food to make Creationist voters happy.
 
Regarding oil specifically, 40% of our oil goes to passenger vehicles, another ~30% for other transportation needs, according to the EIA (2004).
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Half of our power production comes from coal, 20% from nuclear, 20% from natural gas. Only 1.2% comes from petroleum. So the oil problem is really about transportation fuel (we can divide our energy needs into transportation fuel and power for homes, etc).

Environmentally speaking, oil, coal, and natural gas are our big CO2 offenders. Energy-security-wise, we're really just concerned about oil. If we cut our oil demand by 25% then we wouldn't need oil from the middle east, if that were a goal. I figure if there's one issue all politicians *should* be able to get behind is the reduction of oil demand by our country. But remember that it is not just oil companies that would like us to remain dependent on oil. There is *a lot* of related industry with powerful lobbies (car dealers, mechanics, gas stations, oil filters...).

Some resources:
http://www.nrdc.org/air/transportation/gasprices.asp
Electric Power Monthly

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Speculation causing higher oil prices?

The U.S. Commodity Futures Trading Commission (CFTC) has published their interim report on crude oil, which investigates whether speculation is the cause of high oil prices. Not surprisingly, they find that the evidence shows fundamentals (supply and demand) are the cause of rising oil prices.

The report can be read here:

http://www.cftc.gov/stellent/groups...ments/file/itfinterimreportoncrudeoil0708.pdf

But you might want to read the outtakes from The Oil Drum here (shorter):

The Oil Drum | CFTC Report on High Oil Prices -"Speculation My A$$"

Look at this chart of world GDP versus oil production:

CFTC_Fig_1.png
 
[FONT=arial,helvetica,sans-serif][FONT=arial,helvetica,sans-serif]Environmentally speaking, oil, coal, and natural gas are our big CO2 offenders. Energy-security-wise, we're really just concerned about oil. If we cut our oil demand by 25% then we wouldn't need oil from the middle east, if that were a goal. I figure if there's one issue all politicians *should* be able to get behind is the reduction of oil demand by our country. But remember that it is not just oil companies that would like us to remain dependent on oil. There is *a lot* of related industry with powerful lobbies (car dealers, mechanics, gas stations, oil filters...).[/FONT][/FONT]

If memory serves, Carter managed to get oil consumption down from 14m barrels per day to 9m (which at the time meant the country was self-sufficient or almost). But Reagan scrapped Carter's energy policy in 1983 and oil consumption now is at about 22m barrels. Roughly 77% of US oil imports come from Canada and West Africa, and the other 23% from the Middle East (2006 figures, and I'm quoting from memory). But US oil consumption is slated to grow and the major oil fields are in the Middle East. The US adminstration also buys into the Peak Oil Hypothesis (but is perhaps coy about admitting it). US "energy policy" today is essentially its foreign and military policy. For more on this, take a look at this article in Monthly Review.

In the US, there will be a decline of suburban living -- which has been one of two major impetuses behind post-WW2 growth (the other has been military spending). The major cities will have to develop some mass transit, or better mass transit. People will have to live more frugally (which can already be seen).
 
Was it Carter's deregulation of oil prices that got oil consumption down 1978-1981? This led to skyrocketing oil prices (highest until this year in real terms) which did reduce our consumption. That was a pretty tough time I believe.
 
Was it Carter's deregulation of oil prices that got oil consumption down 1978-1981? This led to skyrocketing oil prices (highest until this year in real terms) which did reduce our consumption. That was a pretty tough time I believe.

Yeah, I think so, though I'm not sure whether that was part of an energy policy or the first chill blast of neoliberal "reforms" that would eventually transform American society. Also I need to correct an earlier statement: I think during the tenure of Carter, oil imports fell by 2m barrels per day, but by no means was the country self-sufficient. Also, certain long-term changes, such as increasing energy efficiency in industry and increasing miles per gallon of US automobiles predate the Carter administration, and go back to 1973.

What the country needs is a stable long-term energy policy revolving around energy conservation, mass transit, and the use of alternative fuels. More along the lines of frugal Western Europe. But the one thing the USA is bad at is long-term planning and implementation. So the shock of permanently high energy prices will be greater than it would be with more rational planning.
 
peak oil

Yes, oil peaked a day or so after Boone Pickens was pushing windfarms in the Wall Street Journal.

I promise to put my take on this on my blog and link to it in the near future.
 
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