Oil more profitable than ever - but is it running out? 27 October 05
Big oil firms BP, Shell and now Exxon-Mobil are raking in record profits – in Exxon’s case, just short of $10 billion – on the back of continued high oil prices. It seems like a good time to be in the oil business – but from my perspective as a climate change campaigner, I also have to welcome continued high prices. In today’s New York Times the American Petroleum Institute has taken a full-page ad urging American citizens to save gas by driving slower and using car pools. American friends of mine have just decided to ditch their SUV and get a smaller car, not because they want to save the planet, but because high gas bills are hurting. High oil prices have a knock-on effect throughout the fossil fuel sector, making renewables like wind and solar more competitive. So yes, they do keep unpleasant mega-corps like Exxon in business for a while longer, but that’s a price we have to pay for more realistic pricing of what is after all a finite – and very destructive – fossil resource.
Moreover, the jitters about ‘peak oil’, once confined to a marginal group of activists and exiled petroleum geologists, are now increasingly hitting the mainstream. Also in today’s New York Times is a long article assessing whether or not the Saudis have as much oil in ‘proven reserves’ as they claim. The answer is: probably not. So the peak oilers may have it right – supplies won’t dry up overnight, but once the peak is reached the era of cheap oil, and the lifestyle it has sustained, is over. (The latest estimates are that we’ll hit the peak within five years, maybe sooner.) And here’s where I part company from the peak oil camp: I think it’s a good thing. The Western world was never going to kick its oil addiction voluntarily, so the fact the stuff is running out – and that there are no cheap fossil subsitutes – should be welcomed. This isn’t the place to go into the long discussion, but if you haven’t already read Richard Heinberg’s ‘The Party’s Over’, buy it. Now.
Comments
Peter Winters BHI
October 27th, 2005 at 10:30 PM
I’m with you, Mark. One of the most encouraging things in the battle to save the planet from Climate Change is that cheap oil could be running out. Interest in renewable energy sources has soared in recent months, directly as a result of problems with oil supply.
We have to make sure that we don’t switch from oil to something dirty such as shale oil as coal. Also, don’t develop nuclear too much, in my view.
Peter
Almuth Ernsting
October 28th, 2005 at 10:13 AM
Two thoughts make me very worried about peak oil.
Firstly, I understand that natural gas may be very close to peaking, if not past it. I heard a talk by a peak oil expert last week who said he saw a switch to more coal fire stations as being inevitable (ie far more CO2 emissions from that sector).
Secodly, I am very worried about proposals to increase biofuels. On a small scale, there is probably some scope for them. Right now, however, the EU are debating proposals to lower standards for biofuels so as to permit the use of soya and palm oil from plantations built at the expense of tropical rain forest. Much of this is expected to come from Indonesia. Scientists have estimated that the burning of the peat forests of Indonesia (directly linked to a large part to plantations and plantatin owners) is a major contributor to global warming. In 1997/98, the CO2 released by those fires amounted to up to 40% of global CO2 emissions (more than the US produce), and there have been terrible fires in most recent years, including 2005. Interestingly, the worst fires always coincide with peak rises in CO2 levels in the atmosphere (1998, 2002, 2003) – just my observation. Some of you may have seen this alert on EcoEarth: http://www.ecoearth.info/ .I have also written to my MEPs.
Almuth
Mark Drasdo
October 28th, 2005 at 10:16 AM
There’s an article on the increase in the use of coal at
http://today.reuters.co.uk/news/newsArticle.aspx?type=scienceNews&storyID=2005-10-27T151610Z_01_RID754118_RTRIDST_0_SCIENCE-COAL-POWER-DC.XML
Sounds as if there is plenty of coal left and it must be inevitable that it will be exploited more as oil and gas become more expensive.
Lynn Vincentnathan
October 28th, 2005 at 05:29 PM
Before we start down that road of dirtier & dirtier fossil fuels or nuclear (& the gigantic subsidies that would be needed to make these affordable to regular people), the techie people and governments need to really promote alternative energy & electric cars (or plug-in hybrids). I think that wind is now cheaper than fossil fuels (assuming a level playing field & no subsidies, and calc over the lifespan of wind generators); and solar is also coming down in price fast.
The price of alt energy would really come down in price (I think) with economies of scale—if gov & huge businesses & institutions really signed onto alt energy (or at least a portion in their energy mix).
Once the env movement gets up & going again, then we can all buy “green” – buy from those companies that use alt energy.
Douglas Coker
October 28th, 2005 at 06:05 PM
My observations on Heinbergs The Partys Over are that the book is well worth reading with plenty of history, context and some very useful graphics but he pays little attention to global warming. This is in contrast to Paul Roberts The End of Oil which covers much of the same ground but deals with global warming at greater length. Roberts also explains the workings of oil markets both short and long term. Read both but if you only read one read Roberts.
I went along to the End of Oil conference earlier this month. Very useful, well attended and broad in scope with speakers on the development theme (Simms), food (Lang), carbon reduction (Tovey), sustainable economic systems (Douthwaite) and so on. I couldnt help noticing that the first contributor from the floor was Mayer Hillman who said end of oil bloody good thing too or words to that effect!
John Vidal has reported on the conference in the Guardian here http://society.guardian.co.uk/societyguardian/story/0,,1594927,00.html And there is a very comprehensive conference report at http://www.powerswitch.org.uk/portal/index.php?option=com_content&task=view&id=976&Itemid=2 Here youll find audio files of the speakers, power point presentations and forum threads.
I may have said this somewhere below but its worth repeating. The end of oil and global warming point us in the same direction. We need to develop alternative, sustainable energy resources and we need to embark on a dramatic energy conservation programme. Selling the necessary lifestyle changes now has two strands. If the prospect of CO2 induced global warming doesnt motivate people to change trajectory then maybe rising energy prices and diminishing energy security will.
Douglas Coker
Oh – and a couple of other books on the corruption of science theme well worth reading are Chris Mooney’s The Republican War on Science and Robert F Kennedy Jr’s Crimes Against Nature. Bush and his cronies really are criminals.
Mark Drasdo
October 28th, 2005 at 08:25 PM
...will try and get my hands on The End oF Oil.
Meanwhile, and after reading about the UK’s latest record temperature yesterday-our highest for October 27th, I came across this article linked on the University of East Anglia’s Climate Research Unit’s website..
http://www.theaustralian.news.com.au/common/story_page/0,5744,16925883%255E30417,00.html
Apparently September was the planet’s warmest month yet recorded.
Jake Leighton-Pope
October 31st, 2005 at 10:14 AM
Reading this site over the past month or so I have begun to realise that we only talk in massive concepts. Yes, saving the planet doesn’t get much bigger as a concept I agree, but it seems to me that the only way that we are going to change the tide is bit by bit. It is encouraging that oil prices are rising, it is also encouraging that when watching the West Wing the other night a whole episode was dominated by global warming. Almost every newspaper and TV show has a slot on climate change, even Prince Charles on the eve of his American trip has spoken out on the subject. And people up and down the country are wearing t-shirts on a Saturday afternoon in late October and talking about how mild the climate is.
With all of these little bits of information seeping out into the ether it is time to start to talk about micro changes that actually matter. What can we do as a reaction to oil prices rising, what cars do we buy, how do we heat our houses. What, do we suggest as an action to change?
So I ask do we have any ideas?
Here’s my first. What is stopping us from making every school in Britain solar or wind powered? Think about the message of that. Teaching our kids the benefits of reusable energy by making their schools a working example. A school is a place that the community gathers around, parents would see it, local businessmen would see it, and local government would be involved in it.
Maybe it is purely a money issue, maybe it is an un-workable idea at the moment, or maybe because we keep talking about massive and doomsday esque concepts we have stopped talking about small projects that we can actually do. And maybe bit by bit, little by little, project-by-project we may turn the tide on the big concepts and ultimate fears.
Ian
October 31st, 2005 at 03:24 PM
Hi Jake,
Colin, Dan and I have been talking about energy efficient lamps and low voltage circuits. You maybe interested in that. It is about two conversations down.
Colin has posted a link today on the project he is running (or involved with) in Wales. I have not read it yet. But I believe he is very hands on, making it happen today sort of chap. You may get some joy from that.
I agree, we do waffle on a lot about massive concepts, I shoud point out that changing every school in to an ecco progect is a massive undertaking. However, if you were going to start anywhere, that is the place to start.
I am of the view, that simple changes in legislation are what is required while the big stuff is fully explored. Examples, include; change the law on lamps, only allow the sale of energy efficient products that dont carry a huge carbon debt. Change the law on domestic wind turbines, Having to go through planning regs, get agreement of energy suppliers etc etc. Puts most people off.
Take both those factors. In Sothern Electrics anual report, they talk about domestic wind turbines and say that one of these devices would reduce you electricity bill by upto 40% (I should point out I doubt that is the case, I fear it is just sales talk) I think high teens is about right. However, if most folk did it!!!! Do the sums in your head. It would help.
Lamps, between 17 and 24% of your home energy requirement is on lighting, very few energy efficient lamps are sold in the UK. I Believe I mentioned the Tesco thing on another post.
Just a simple change to the law could make massive differences here in the UK. It wouldn’t be enough, but it would be a huge step in the right direction.
I could talk more about changing the way we build and insulate our homes and offices. But I shall save that for another day.
Best Ian.
PS. Remember remember the 3rd of December.
OH… And down to SUV’s
Lynn Vincentnathan
October 31st, 2005 at 03:27 PM
We need to be acting on all levels – home, work/school, community, state, national, international. We need to do more, talk less about whether or not GW is happening…
School can at least have small “educational” solar & wind projects.
Lynn Vincentnathan
October 31st, 2005 at 03:41 PM
Another article about increasing coal use:
http://www.climateark.org/articles/reader.asp?linkid=47771
Add to that the Canadian tar pits…
The article did mention coal’s safety (in re to gas). And I suppose coal is safer to transport & for the consumer (assuming he/she doesn’t live near the coal fire plant), but…
What about coal miners, accidents, and black lung
What about damage to lands near the coal mines – esp now that they just dig up the whole mountain or field rather than sink mine shafts.
What about acid rain destroying forests, lakes, and let’s not forget food crops.
What about air pollution (small particulate matter kills 55,000 Americans each year)
And what about global warming.
They say coal tech is getting cleaner, but my guess is it’s still dirtier than gas & involves more GHGs.
At least we can’t drive our cars on coal (as is)...yet.
Jake Leighton-Pope
November 1st, 2005 at 11:18 AM
Ian, thanks for your response to my post. I am a climate change virgin to be honest so all of this information is great stuff. My girlfriend has just stumbled across this site www.ecotricity.co.uk, do you know anything about it?
Jake
Peter Winters BHI
November 1st, 2005 at 12:39 PM
Hi Jake,
You might also like to try these people. They are the ones I use:
http://www.good-energy.co.uk/
Ecotricity were making a few dodgy claims about being the only green electricity supplier a few months ago based on a poor article (in my opinion) in the Ecologist.
I am sure there is plenty more choice.
Best wishes,
Peter
Ian
November 1st, 2005 at 01:18 PM
Hi Jake,
Yes I was aware of these guys. I am a Reading resident, and their new turbine is going up in Reading’s Green Park Industrial Estate. Tomorrow, which happens to be my Birthday. 36 and still handsome.
I would echo what Peter has said. I quite like what good-energy are about. They have about 15,000 customers now and are really commited to the cause. I dont feel like they are supper sales speak if that makes sence. I just think they get it. And I kind of dont think these guys have, I think they are jumping on to the ecco band wagon and are only in it for the money. I guess we are going to see a lot more of that as time goes on.
There are other people doing the same think, I believe you can sign up to a simmilar program through Green Peace.
Again here in the UK, The band wagon bragade are selling domestic turbines illeagaly. It is a one meter diamiter three blade turbine. You errect it to the side of your house and plug it into your mains. When you are not using power it runs your meter backwards. They are selling these for about £1,000
Here is the problem. It is upseting the electrical companies. so the chances of genuine co-operation from them is diminished. The second is these turbines are fairly primitive. What happens in extreame whether, ie, a big gust of wind. They dont have circuit brakers or a gearing mechanism. What went pop it think a few folk will end up saying.
Not all thats green is green.
Best Ian.
remember remember the 3rd of december.
Neil Wallis
November 4th, 2005 at 01:34 PM
I’m not sure we can afford to be glib about the prospect of ‘peak oil’ if some of the more apocalyptic scenarios I’ve recently read (Jeremy Leggett, Paul Mobbs) are anywhere near right.
The gist of what they’re saying, I think, is that we’ve used the World’s bountiful supply of liquid energy – produce through a natural biofuel conversion process over millennia – in the space of a century or so. (Insodoing we’ve disrupted the climate by releasing carbon that was locked away over thousands/millions? of years in the historical equivalent of the ‘blink of an eye’.)
The big problem they say is that there is no other source of energy that can be anywhere near as cheap or bountiful to fuel our addiction and that our economies have become completely designed around the assumption that the oil (and gas) will continue to flow. The pessimists are saying that having to end our oil addiction is going to cause economic collapse and that the only thing to do is head for the hills and live self-sufficiently. Indeed, they say, perhaps the world’s population has expanded beyond the capacity it can possibly continue to support once the age of oil is over.
Which is the more terrifying: climate catastrophe or economic collapse? Take your pick.
(On another point, certainly the oil companies mustn’t be allowed to continue sharing the outrageous profits amongst themselves – how about windfall taxes that are only avoidable if profits are reinvested in renewable sources?)