The Oil Drum

IMO, large, militarily weak exporters like Saudi Arabia are afraid of military takeovers; therefore, they are always trying to talk down Peak Oil theories.

It's also possible that they are trying to talk down oil prices, while they are secretly going long on the oil markets.  

In any case, depletion marches on--the world is consuming (from fossil fuel + nuclear sources) the energy equivalent of a billion barrels of oil every five days.

At current rates of fossil fuel + nuclear use, we consume the energy equivalent of all of Texas' oil production to date (about 60 Gb)--every 10 months.  We consume the energy equivalent of all the North Sea's oil production to date about every seven months.

The onset of triple-digit prices might seem a blessing for the Saudis - they would receive greater amounts of money for their increasingly scarce oil. But one popular misunderstanding about the Saudis - and about OPEC in general - is that high prices, no matter how high, are to their benefit.

Although oil costing more than $60 a barrel hasn't caused a global recession, that could still happen: it can take a while for high prices to have their ruinous impact. And the higher above $60 that prices rise, the more likely a recession will become. High oil prices are inflationary; they raise the cost of virtually everything - from gasoline to jet fuel to plastics and fertilizers - and that means people buy less and travel less, which means a drop-off in economic activity. So after a brief windfall for producers, oil prices would slide as recession sets in and once-voracious economies slow down, using less oil. Prices have collapsed before, and not so long ago: in 1998, oil fell to $10 a barrel after an untimely increase in OPEC production and a reduction in demand from Asia, which was suffering through a financial crash. Saudi Arabia and the other members of OPEC entered crisis mode back then; adjusted for inflation, oil was at its lowest price since the cartel's creation, threatening to feed unrest among the ranks of jobless citizens in OPEC states.

"The Saudis are very happy with oil at $55 per barrel, but they're also nervous," a Western diplomat in Riyadh told me in May, referring to the price that prevailed then. (Like all the diplomats I spoke to, he insisted on speaking anonymously because of the sensitivities of relations with Saudi Arabia.) "They don't know where this magic line has moved to. Is it now $65? Is it $75? Is it $80? They don't want to find out, because if you did have oil move that far north . . . the chain reaction can come back to a price collapse again."

(Higher prices don't immediately generate a recession because some regions are benefitting from the higher prices.)

1. The carefree "cult of comfort" stories that MSM pumps out to the lay public about their PP (Pain at the Pump) now appear as raw propaganda rather than as incisive reporting (we reporterize, you moterize and then decide ... as if, ha, you actually have a functional brain once we get through with you).

2. Those muscular Hemmi engine Hummers now look like like starving dinasours instead of the engineering marvels they once were.

3. Wal-Mart is the country too far instead of the local mega-depot for all things consumable.

However, just like a pipeline, that crude-in-transit isn't like a SPR where you can vary the "reserve" from zero to full. Becuse these ships are slow in the first place, there is no JIT delivery. The ships have a top speed of like 15 knots (17mph) so a trip across the Atlantic is no crosstown drive.

seriously, risk is a hard question.  if one can exclude the possibility of tipping-points (big question), then it breaks out to winners and losers on a regional scale.  certainly it is foolish to simply assume that you'll be one of the winners.

blythe optimism may be a good survival strategy in general, but not in ever specific.

The Met Office are running simulations, the predictions at the moment are that the very hot European summer of 2003 will be an average summer somewhere around 2060, and a cool summer from 2070 onwards. That, of course, depends on how much CO2 is in the atmosphere and how much global dimming is reduced. That leaves a very wide range of temperatures possible.

My gut feeling is that we will be in the upper range of CO2 predictions because the public won't want to implement to changes needed to reduce CO2 emissions (i.e. a big power down in society/economy to reduce CO2 emissions).

The BBC are running a series of GW programs using the music saying "its the end of the world as we know it" with George Bush in an SUV grinning and giving a thumbs up. This is fairly typical of the BBC running GW programs every now and again.

I passed by the billboards at the movie theater this weekend and didn't realize this was an Al Gore production. Al Gore may be just the right kind of person to pass this "Inconvenient" truth onto the mesmorized masses.

Saving humanity may be Mission Impossible IV.