It’s the oil, stupid

It’s the oil, stupid

24 May 2006

“The energy panic is here. The inevitable crisis that a handful of us have warned of for over a decade is upon us. Oil’s hit US$75 a barrel, driven on by Bush’s mad plan to nuke Iran. Welcome to the rest of our lives.” Old Possum said, taking another sip from his cider.

The rest of our lives. Easy for you to say, I thought, remembering that the old bastard was old enough to have seen Wall Street in 1929. We were sitting at one of the tables outside the Brushtail Café. The sun was going down on an amazingly clear Sydney day. Thanks to an eight per cent drop in petrol sales, and hundreds of thousands of people quitting the city for the school holidays, the pollution haze had cleared and you could see into tomorrow.

“Yeah, George Bush is panicking too”, I replied. “Did you read where he made a speech on Earth Day, saying the US had to move quickly towards hydrogen-powered vehicles”.

“Quickly? He’s playing with himself again. To replace just half of America’s ground transport fuels by 2025 (that’s mostly petrol) with hydrogen from electrolysis would require a doubling of electrical energy output. That’d be disastrous in terms of global warming, because, realistically, most of that energy would have to come from burning fossil fuels, so electrolysis makes little sense for the foreseeable future. And leaving aside the greenhouse issues, the technical problems with bringing hydrogen into widespread use as a fuel are just horrendous. Don’t hold your breath waiting for it. Even with a concerted international push, it’d take a couple of decades to get anywhere. That’s twenty years of oil supplies declining at two per cent, minimum, very year, with inflation skyrocketing, before hydrogen began to make serious inroads.”

“What about ethanol?”

“It’s been calculated that if all Australia’s current sugar cane production went into making ethanol we’d get about 5 litres per car per week. That’s about 50 kilometres of driving and no sugar on the table. And widespread use of electric cars would require lots of extra power stations and billions of dollars worth of overhaul to the grid.”

Yeah. he’s right I reflected. There isn’t going to be an elegant market solution.

“Check this out”, Old said. He unfolding a piece of A4 and smoothed out the creases. “I made up this graph from International Energy Agency figures for production of oil and natural gas liquids. It’s for the twelve months to February this year. I’ve broken it into OPEC and non-OPEC production. As you can see, output is virtually flatlining.”

“Yeah, but the media is saying that’s just caused by this rebellion in Nigeria, and some refinery problems.”

“There were always production glitches, but in spite of everything, on average, production has risen to meet increased demand for decades. Now, we’ve hit the geological limits. In country after country, oil production has peaked and then gone into decline. The underlying cause is peak oil. If you aggregate every country, we’re now at, or very close to, the peak of world oil production. From the peak, production will decline by at least 2 per cent every year. The oil experts have been warning about this for more than a decade. But guess what: the politicians and the economists just refused to listen and the journalists wouldn’t do the story because they were scared they’d be laughed at. George Bush never mentions peak oil but he’s a Texas oilman so we can be sure he believes in it because US oil production peaked thirty years ago, exactly as predicted.”

“What about the Iraq war?”

“There’s an object lesson in that. The neocons reckoned it would give the US an oil windfall so invasion was supposed to be virtually self-financing instead of which the war dragged on crippling the oil industry there. And now, with Bush’s threats to bomb Iran into submission, every nation in the world that doesn’t actually sit on an oilfield is shit-scared about security of supplies and they’re all trying to put their thumb on whatever’s available and so they’re bidding up the price.”

“In a word, the market’s panicked.”

“The panic is rational. Everyone’s scared that everyone else is scared that the stuff will suddenly be in short supply – very, very short if the Yanks nuke Iran. And they might do that just to deny Iranian oil to China and other rivals.”

“The politicians should have been taking peak oil seriously a decade ago” I said, twisting the top off another cider. “Now it’s too late because the lead-times necessary to build new infrastructure and develop feasible alternatives are huge. Even if the state government decided right now to build a public transport network to cover the parts of Sydney where people are totally car-dependent, it’d take twenty years to do it. So we’re gonna hit the wall, I’m afraid.”

AND NOW READ ...

Use your brain Morris, take the train
Oil’s inexorable decline must drive Sydney public transport reforms

By MATT MUSHALIK and GAVIN GATENBY*
29 September 2005
Possum News Network

History will record that the Carr Government’s greatest failure was that it squandered the opportunity to make timely preparations for “peak oil”. Few Australians are familiar with this phenomena, but its ramifications will seep into every aspect of political and social life in the coming years.

For a whole decade state cabinet ignored a sincere and increasingly strident warning from oil industry experts: the maximum possible level of world oil production was imminent and would be followed by inexorable decline. It remains to be seen whether the Iemma cabinet will face the issue squarely or remain in denial.

		From under the linoleum Old newspapers show Mussolini's imperialism looked a lot like today's I sat on the floor and picked through the tragedy of the country we now call Ethiopia laid out on the yellowing pages. It was eerily reminiscent of the current Iraq adventure. A tale for our times The December 1934 assassination of Sergei Kirov Seventy years on, the killing of Sergei Kirov casts an eerie light on the events of 11 September 2001, the invasions of Iraq and Afghanistan, the “war on Terror” and the state-sponsored hysteria surrounding the shadowy figures of Osama bin Ladin and Abu Musab al-Zarqawi. Ninety-three years of bombing the Arabs It was the Italians, hell-bent on acquiring an African empire, who got the ball rolling. In 1911 the Libyan Arab tribes opposed an Italian invasion. Their civilians were the first people in the world to be bombed from the air. Dispossessed all over again After spending nearly two months in the West Bank the pull towards my village was growing stronger, especially after being detained twice and threatened with deportation … an Australian Palestinian returns to her ancestral home. The tragic inevitability of a forlorn hope Australia slides further into the Iraq quagmire Cabinet documents recently released under the 50-year rule show that, in 1954, Liberal (conservative) Prime Minister, Robert Menzies, and key figures in his Cabinet were extremely gloomy about the prospects for success in an American war against nationalists in Indochina. But eventually they went to the Vietnam War anyway. Bombing King David One man’s freedom fighter is another’s terrorist Some historians date the beginning of modern terrorism from the 1946 bombing by Zionist terrorists of the British military HQ in Jerusalem. Don’t loiter near the exit Military debacle and economic decline haunt the Bush regime When I was just a young possum in the school cadet corps there was a hoary old war story that we all knew. It was almost certainly apocryphal, but it ruefully expressed a nasty historic truth about the US role in the demise of the British Empire.


We've been online since 1997. Check out the archives or … powered by FreeFind © Nick Possum/ Brushtail Graphics	It’s the oil, stupid 24 May 2006 “The energy panic is here. The inevitable crisis that a handful of us have warned of for over a decade is upon us. Oil’s hit US$75 a barrel, driven on by Bush’s mad plan to nuke Iran. Welcome to the rest of our lives.” Old Possum said, taking another sip from his cider. The rest of our lives. Easy for you to say, I thought, remembering that the old bastard was old enough to have seen Wall Street in 1929. We were sitting at one of the tables outside the Brushtail Café. The sun was going down on an amazingly clear Sydney day. Thanks to an eight per cent drop in petrol sales, and hundreds of thousands of people quitting the city for the school holidays, the pollution haze had cleared and you could see into tomorrow. “Yeah, George Bush is panicking too”, I replied. “Did you read where he made a speech on Earth Day, saying the US had to move quickly towards hydrogen-powered vehicles”. “Quickly? He’s playing with himself again. To replace just half of America’s ground transport fuels by 2025 (that’s mostly petrol) with hydrogen from electrolysis would require a doubling of electrical energy output. That’d be disastrous in terms of global warming, because, realistically, most of that energy would have to come from burning fossil fuels, so electrolysis makes little sense for the foreseeable future. And leaving aside the greenhouse issues, the technical problems with bringing hydrogen into widespread use as a fuel are just horrendous. Don’t hold your breath waiting for it. Even with a concerted international push, it’d take a couple of decades to get anywhere. That’s twenty years of oil supplies declining at two per cent, minimum, very year, with inflation skyrocketing, before hydrogen began to make serious inroads.” “What about ethanol?” “It’s been calculated that if all Australia’s current sugar cane production went into making ethanol we’d get about 5 litres per car per week. That’s about 50 kilometres of driving and no sugar on the table. And widespread use of electric cars would require lots of extra power stations and billions of dollars worth of overhaul to the grid.” Yeah. he’s right I reflected. There isn’t going to be an elegant market solution. “Check this out”, Old said. He unfolding a piece of A4 and smoothed out the creases. “I made up this graph from International Energy Agency figures for production of oil and natural gas liquids. It’s for the twelve months to February this year. I’ve broken it into OPEC and non-OPEC production. As you can see, output is virtually flatlining.” “Yeah, but the media is saying that’s just caused by this rebellion in Nigeria, and some refinery problems.” “There were always production glitches, but in spite of everything, on average, production has risen to meet increased demand for decades. Now, we’ve hit the geological limits. In country after country, oil production has peaked and then gone into decline. The underlying cause is peak oil. If you aggregate every country, we’re now at, or very close to, the peak of world oil production. From the peak, production will decline by at least 2 per cent every year. The oil experts have been warning about this for more than a decade. But guess what: the politicians and the economists just refused to listen and the journalists wouldn’t do the story because they were scared they’d be laughed at. George Bush never mentions peak oil but he’s a Texas oilman so we can be sure he believes in it because US oil production peaked thirty years ago, exactly as predicted.” “What about the Iraq war?” “There’s an object lesson in that. The neocons reckoned it would give the US an oil windfall so invasion was supposed to be virtually self-financing instead of which the war dragged on crippling the oil industry there. And now, with Bush’s threats to bomb Iran into submission, every nation in the world that doesn’t actually sit on an oilfield is shit-scared about security of supplies and they’re all trying to put their thumb on whatever’s available and so they’re bidding up the price.” “In a word, the market’s panicked.” “The panic is rational. Everyone’s scared that everyone else is scared that the stuff will suddenly be in short supply – very, very short if the Yanks nuke Iran. And they might do that just to deny Iranian oil to China and other rivals.” “The politicians should have been taking peak oil seriously a decade ago” I said, twisting the top off another cider. “Now it’s too late because the lead-times necessary to build new infrastructure and develop feasible alternatives are huge. Even if the state government decided right now to build a public transport network to cover the parts of Sydney where people are totally car-dependent, it’d take twenty years to do it. So we’re gonna hit the wall, I’m afraid.” AND NOW READ ... Use your brain Morris, take the train Oil’s inexorable decline must drive Sydney public transport reforms By MATT MUSHALIK and GAVIN GATENBY* 29 September 2005 Possum News Network History will record that the Carr Government’s greatest failure was that it squandered the opportunity to make timely preparations for “peak oil”. Few Australians are familiar with this phenomena, but its ramifications will seep into every aspect of political and social life in the coming years. For a whole decade state cabinet ignored a sincere and increasingly strident warning from oil industry experts: the maximum possible level of world oil production was imminent and would be followed by inexorable decline. It remains to be seen whether the Iemma cabinet will face the issue squarely or remain in denial.