The latest on the energy crunch
st1\:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; mso-ascii- mso-ascii-theme- mso-fareast- mso-fareast-theme- mso-hansi- mso-hansi-theme- mso-bidi- mso-bidi-theme-} Frankly, there is no way to sugarcoat this subject. The global demand for oil continues to climb ”“ in spite of the recent reduction of oil imports in this country ”“ while global supply of oil is gradually dropping. Known as peak oil, this emerging drama should be an immediate concern of the business community as well as every citizen in this country, but unless you are a regular reader of The Wall Street Journal, not just the front page, this will still be an unfamiliar topic.
Two years ago I went to my first ASPO-USA (Association of the Study of Peak Oil) conference in Boston. I had been writing about peak oil for almost a year, but to attend a conference filled with graphs and data illustrating in gruesome detail the absolute disconnect between projected energy demands and declining oil supply, was stunning. Last year the conference was in HoustonSacramento and the alarm bells were really clanging. More than 500 people were in attendance, all age groups, mostly men, many investors, professors, intrigued citizens, many retired people worried about their grandchildren. Every reader needs to absorb the reality of this developing crisis, promising to be bigger than the current Wall Street fiasco. and the lead time for a real energy crunch was considered to be substantially shorter. This year, the conference was held in
Globalization will be going in reverse, according to Jeff Rubin, chief economist of CIBC World Markets. It is now becoming rather obvious that globalization depends on cheap energy, not just cheap labor. Whatever products are created in Southeast Asia or China obviously require a great deal of energy to transport back to this country. Because of this turn-around, U.S. steel is becoming competitive again. The emerging principle for the business community and indeed all citizens is becoming ”“ “shorten the supply line” of whatever you are producing, eating, wearing, turning on, etc. Transport miles cost money, a lot of money now and will cost a lot more in the near future.
Andy Weisman, editor of Energy Business Watch, claimed that the disconnect between supply and demand will only get the public”™s attention when it reaches your neighborhood. Oil is a global commodity, not under the control of this country. As someone said ”“ “What”™s our oil doing under their sand?” To bring this global topic right into your neighborhood consider that the high cost of gas has caused many stations to close down. Further, gas distributors are only delivering reduced loads to some of the remaining station owners because of shaky credit. On top of that, the inventory in the country is so low, because of the storms in the Gulf of Mexico, that if everyone topped off their tank, an increasing inclination with the rising price of filling the entire tank at one time, the inventory in the entire country would drop precipitously. According to many gas station owners, drivers are not infrequently buying just $5 worth of gas at a time.
An underreported indication of troubles to come is that the lights are already going out in the poorest parts of the world because of the inability to afford oil. In Pakistan, many of the islands in the South Pacific, Africa, Central America, the lights are dimming. In Africa there is a lot of oil but Africa needs to benefit from its own resource. Nonetheless, China is making tough trade agreements to assure itself adequate energy when the market tightens.
Meanwhile, King Abdullah has stated that ”“ “The oil boom is over and will not return and we must get used to a new lifestyle.” Abdullah is the king of Saudi Arabia and should know what is talking about. Matt Simmons, who sounded the alarm of Peak Oil in “Twilight in the Desert,” has another take on the current situation ”“ “We have created a wild west, worse than the Roaring Twenties.”
With so much evidence to back up the coming reduction in oil production, it is quite incredible to see the ends to which public officials will go to dismiss the whole notion of peak oil. Conspiracy theories abound. Dr. Henry Kissinger claims there is no problem. Newt Gingrich is equally dismissive. Even Daniel Yergin, so-called oil expert, claims ”“ “Peak oil is a crock.” The media is equally disinterested in a subject that absolutely will affect the future of every citizen. At the Sacramento conference, no mainstream media was in evidence, only a multitude of smaller publications ”“ one of them The Arch Druid Journal. This was California, after all, my native state.
Several speakers commented on the rising chorus of “Drill, baby, drill,” political pandering in their view. Jeremy Gilbert, former BP chief petroleum engineer, has dispatched all the staggering numbers bandied about as to the oil to be harvested on the outer shelf, in ANWR (Alaska National Wildlife Reserve), tar sands, oil shale, by saying the only numbers in these reports you can depend are the page numbers. For those that claim there is plenty of oil one of the speakers pointed out that “the stone age did not end because they ran out of stones.” More news from California in the next column.
Surviving the Future explores a wide range of subjects to assist businesses in adapting to a new energy age. Maureen Morgan, a transit advocate, is on the board of Federated Conservationists of Westchester. Reach her at mmmorgan10@optonline.net.