The Oil Drum

This is a guest post by Jean Laherrere.


World Arctic cumulative discovery.

This is a continuation of the booklet discussed previously. A PDF of this chapter is included at the end of this story, if you would like to share it with others.

Chapter 2: Is This a False Alarm?

As we look at the answers to these questions, we will see that the production decline discussed in Chapter 1: What Is Peak Oil? appears to be nearly immediate. Available methods for offsetting this decline appear to be too little, too late. This time the alarm is real.

1. It seems like people thought we were running out of oil in the 1970s, and then all of our problems went away. Why is the situation different now?

Well here I am sat by the tele, waiting for the BBC show, If the Oil Runs Out, the facts upon which they base it being given here.

Pause while 3,550,000 barrels of oil are consumed, (the show mentions that) and what did I think?

Well I could begin by suggesting they had the wrong buttons on the drill bit, but that would be a bit facetious. In a very small nutshell, it tracks a family during the time that the first well is drilled in ANWR, (in 2016) at the same time that President Chavez in Venezuela pulls his country out of OPEC, and that Saudi and China get together to do a goods for oil swop. Oil prices rise and the consequences are transiently illustrated through the impact on the family (losing job, long gas lines, food prices up, aspirin (an oil product) out of stock, and the like). The well is being drilled in the purported last hope for oil. And it does not find the 250 m of oil that was anticipated. But seven months later they are through the crisis and into another world.

Looks like there's plenty to keep y'all busy today, so I'll just point out a couple of relevant posts from other blogs.

A couple of days ago, Gristmill's Tom Philpott reported on a Wall Street Journal article suggesting that the Chinese demand for oil is slackening this year.

Environmental Economics has a great quote from Sen. Pete Domenici, who asked the oil company execs to explain to him how the price of oil is determined, since "my constituents and, I believe, most Americans think that somebody rigs these prices".

Both of these blogs also mention that the provision to drill in the Arctic National Wildlife Refuge has been removed from  the spending bill (just in case you hadn't heard).

This looks pretty interesting...

MOVIE: OIL ON ICE Thursday, Nov. 10, 8 p.m.

TIME'S UP! Space, 49 E. Houston (between Mott & Mulberry)

This in-depth documentary examines the raging controversy over drilling for black gold in a 1.5-million-acre area of the pristine Arctic National Wildlife Refuge. The film follows the efforts of environmentalists and Alaskan natives to protect the site from oil exploration and development, dramatizing the choice between fossil fuel technologies and those that take advantage of renewable energy resources.  

More Info and trailer

What's clogging your mind this week?

I'm thinking about how the Senate just voted to allow oil drilling in Alaska's Arctic National Wildlife Refuge. You know, because that's going to do us all so much good in the long run. While it's doubtful that we'll gain much if we drill in the Refuge ("energy independence"? Yeah, right), it's certain that we'll lose a lot. If you've never seen Subhankar Banerjee's photographs, check them out. You can also read more about why he undertook the project to protect the area from drilling. (More on the story, and the Democratic opposition, here.)

I just want to take a second to explain myself here. Some of you took this post to mean that I don't believe that the oil companies have made windfall profits this year. Of course I know they did, and even if I didn't before, I certainly can't refute the recent Exxon and Shell announcements. My point in that previous post was that I am frustrated that politicians have decided to focus all of their interest in energy issues on the windfall profits, rather than on more important concerns, like, say, whether or not the Saudis have as much oil as they say they do. As I said in the comments to my earlier post, lowering gasoline prices for the consumer now just doesn't make any sense given the larger supply issues that keep emerging.

Still, on the topic of windfall profits, Gristmill reported a good one today:

At a press conference this afternoon, Secretary of the Interior Gale Norton came up with another creative reason to open the Arctic Refuge to drilling: The oil companies need some place to invest their record profits!