Message: Get used to High Oil Prices - Joseph Romm - Oct. 25/07
Get used to high oil prices
No supply-side energy solution will come to our rescue
Posted by Joseph Romm at 5:06 PM on 25 Oct 2007
No one is going to come to the rescue on the supply side -- and, of course, we remain stuck with an administration that doesn't believe in demand-reduction strategies.
As the Wall Street Journal (subs. req'd) reported in "OPEC's Lever Loses Its Pull on Oil":
Oil prices are hovering near historic highs, but consuming nations shouldn't expect quick relief from OPEC, the world's only source for big, quick supplies.
For several reasons, the Organization of Petroleum Exporting Countries has neither the clear leverage nor the inclination to open the spigots and drive down the price of crude, which jumped past $90 a barrel in intraday trading in New York last week for the first time.
This figure shows how little spare capacity OPEC has -- essentially none outside of Saudi Arabia, and the Saudis have no inclination to initiate a major price drop, especially since these prices do not appear to be destroying demand.
Moreover, the International Energy Agency (IEA) warned back in July that it saw "OPEC spare capacity declining to minimal levels by 2012."
And the WSJ notes no one outside of OPEC will be coming to the rescue either:
Saudi Arabia has little to fear from the world's other major producers, such as Russia, which in decades past have ramped up supplies in an effort to capture a greater market share. But at the moment, the world's major producers for the most part are already pumping flat-out.
"They have little competition from non-OPEC suppliers and few worries about losing market share," says Jeffrey Currie, senior energy economist at Goldman Sachs in London.
We cannot be far from $100+ oil.
This post was created for ClimateProgress.org, a project of the Center for American Progress Action Fund.
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What about ANWR, what about off shore? Huh? Sure we're approaching Peak Oil if we haven't rolled over it already and higher oil/gasoline prices will spur development of alternative energy sources. But why not get our oil from our own sources? Like it or not we still need fossil fuels. Don't even try to tell me it's the environment that will suffer if we drill in and around the US. Otherwise you'd be all over Castro for doing it. http://www.marinelink.com/Story/Cuba... ... Your silence is deafening! |
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Peak Oil and Its Consequences and the US CRUDE OIL - THE SUPPLY OUTLOOK - Report to the Energy Watch Group.From page 12. October 2007 - EWG-Series No 3/2007 "This paper is one of many by authors inside and outside ASPO (the Organisation for the Study of Peak Oil) showing that peak oil is anything but a "theory", it is real and we are witnessing it already. According to the scenario projections, the peak of world oil production was in 2006." http://www.energywatchgroup.org/file... ... Supporting statement 1 Supporting statement 2 Living in a world of a declining oil output with increasing demand and spiralling oil prices is clearly going to be dramatically different from living in a time where oil output was increasing, abundant and cheap. [paraphrased] Biofuels sound so environmentally friendly but sadly things aren't always what they seem, with their dreadful consequences, rainforest deforestation, rocketing food prices as foods are increasingly diverted for conversion into vehicle fuels and thereby result in worsening third-world starvation. What does it all mean for the future? When the effects of peak-oil begin to bite, energy costs will soar, severely impact the costs of transportation and manufacture, which are very likely to exacerbate the resultant US economy slowdown. Such a slowdown combined with high energy costs will substantially affect and hinder investment in new technologies and inhibit competition with the world market [China & India], who will have in all probability stolen a lead over the US in technological advances. There is a huge amount of monies presently ear-marked originally for the questionable NASA manned Mars landing, this could be put towards better uses. Such as, if the US were to invest in the future by funding a series of research and development grants to industry for renewable energy sources, new transport technologies, increased energy efficiency and preparing for the inevitable decline in oil output. That way, the worst effects of the slowdown resulting from the passing of peak oil could be averted and the US economy could be given a substantial boost and move ahead. These new technologies would restore the US lead in technology, boost exports, reduce the trade deficit and could help benefit the US by helping reduce its dependence upon imported oil. At the same time CO2 emissions could be reduced substantially. Which might just be quite a good idea! |
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