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  • #444
    Avatarjeff
    Member

    GAO: Looming Threat to US Oil Supply
    By Matt Renner
    t r u t h o u t | Report

    Friday 30 March 2007

    A report released Thursday by the non-partisan Government Accountability Office concludes that worldwide oil production will eventually grind to a halt and the United States has no strategy in place to deal with the possible catastrophic results.

    The report, titled “CRUDE OIL – Uncertainty About Future Oil Supply Makes It Important to Develop a Strategy for Addressing a Peak and Decline in Oil Production,” outlines the threat to oil supply posed by global political instability and the lack of new oil field discovery. According to the report, “More than 60 percent of world oil reserves, on the basis of Oil and Gas Journal estimates, are in countries where relatively unstable political conditions could constrain oil exploration and production.” These countries include Venezuela, Saudi Arabia, Iraq, Iran and Nigeria. Energy market analysts agree that the significant threat of instability in oil producing nations has inflated the price of oil.

    As the report demonstrates, it is quite unclear when peak oil production will occur: “The amount of oil remaining in the ground is highly uncertain, in part because the Organization of Petroleum Exporting Countries (OPEC) controls most of the estimated world oil reserves, but its estimates of reserves are not verified by independent auditors.” Despite a lack of reliable information, the report states that “most studies estimate that oil production will peak sometime between now and 2040.” Some analysts think world oil production has already peaked.

    “Today’s report once again emphasizes our need to prepare for peak oil by implementing forward-thinking approaches and advance initiatives that will move our nation toward greater energy stability and independence,” Congressman Tom Udall (D-NM) said during a joint press conference with his Republican counterpart after the GAO released its findings.

    Congressman Roscoe Bartlett (R-MD) called the report “a clarion call for leadership at the highest level of our country to avert an energy crisis unlike any the world has ever before experienced.”

    Tensions with Iran pushed crude oil prices above $66 per barrel Thursday, a six-month high, as analysts fear that a confrontation with the regime could jeopardize exports from the country. In 2005, worldwide oil consumption surpassed 84 million barrels per day. By 2030, that number is expected to reach 118 million barrels per day, 40 percent of which would come from China and India, according to the report.

    The report also addresses a need for significant investment in alternative fuels for transportation such as “ethanol, biodiesel, biomass gas-to-liquid, coal gas-to-liquid, natural gas … and hydrogen.” But investment in alternative fuels to offset expected crude oil shortages continues to lag. The report noted that within the next five years, ethanol produced from plant matter could be available commercially. Currently, ethanol production is limited to about 5 billion gallons per year because corn, the main ingredient used to produce ethanol, is needed to feed livestock, the report states. The report concludes by encouraging the Secretary of Energy and other relevant federal agencies to create and implement a plan to stave off peak oil.

    The first step, however, is figuring out exactly when world oil production will peak.

    Matt Simmons is the president and founder of Simmons and Company International, one of the largest investment banks serving the oil industry. Simmons’s company has invested billions of dollars in oil-related technology and played a major role in the development of new technologies over the past thirty years. He says the industry “doesn’t have any new technology coming on line,” adding that “the idea new oil extraction technology can save us is a complete fallacy.” Simmons thinks that world oil production may have peaked in 2005 and said “the odds of us not peaking in the next five years are zero.” Simmons called the work of Congressmen Udall and Bartlett “a heroic effort to awaken our country to this threat to the survival of our economy.”

    Bob Gallagher, president of the New Mexico Oil and Gas Association, has a more conservative view of the current situation. He said market forces will drive the production of alternative fuels quickly enough to supplement crude oil. However, he finds this report encouraging. “If this report serves as a wake-up call to Congress and the American public, it will be well served. The government has failed the American public with regard to energy policy.” His concern is over our reliance on imported oil from unstable regions such as the Middle East.

    Phil Flynn, vice president and senior energy analyst for Alaron Trading, agrees that the tensions in global oil supply are distressing. He speculates: “If people take [the GAO] report as gospel, it alone could drive oil prices up. We may see oil hoarding by companies and even countries. It could create a panic situation.” He adds, “If Venezuela cuts off exports or China begins hoarding, or the Middle East becomes more unstable, we could have severe problems.”

    #2261
    AvatarAaronB
    Member

    Peak Oil is a long-term problem that most people are not aware of and feel powerless to do anything about. However, when I learned about the potential of Focus Fusion, I decided that it was the only solution that could solve the problems of replacing the gross energy output of all fossil fuels, without the harmful emissions, without taking up thousands of square miles of land, etc. Alternative energy is great, and I think Focus Fusion is the best of them all. The challenge will be to develop and refine the technology before the consequences of Peak Oil become too pronounced.

    #2265
    AvatarTransmute
    Member

    I’ve always worried about peak oil, more so then global warming. Global warming is a SLOWLY growing problem, in theory dealing with it by adapation alone is possible, peak oil is diffrent: if global warming is like being chewed on by rats, peak oil is like a sudden blow to the skull with an axe! Peak oil could crash civilization as we know it and its likely to happen sooner (within a decade or even now) rather then later. For some reason peak oil does not get the attention it needs.

    #2295
    AvatarGlenn Millam
    Member

    I second Transmute about peak oil. If you want a good primer on what we face about peak oil, read The Coming Economic Collapse by Dr. Stephen Leeb and Glen Strathy. Its actually an investment book that turned into a warning as Dr. Leeb learned more about what he was researching.

    #2709
    AvatarJimmyT
    Participant

    The world is NOT running out of oil! Not anywhere close. But it is running out of cheap oil. In the past oil has been available at a lift price ( the price to pump it out of the ground) of 50 cents a barrel (in Saudi-Arabia) to $15 a barrel for north sea crude. Much oil is available at somewhat higher prices. Proof of this is the recent “discovery” of deposits in North and South Dakota and of an oil field off the coast of Brazil. Both of these deposits have been know about for some time (in the case of the Dakota fields about 30 years). But both the technology to exploit them, as well as the economics of exploiting them has been abscent.

    Synthetic oil can also be produced from coal as the Germans did in WWII and the South Africans have been doing for decades. The process is called the Fischer-Tropsch process and oil can be thus produced for around $20 to $30 a barrel. Feedstock can be anything from coal to organic matter.

    Focus fusion can dramatically reduce our use of this more expensive oil, and thus both reduce its cost (from a supply and demand perspective) and render its higher cost much less relevant to our economy.

    #2711
    AvatarGlenn Millam
    Member

    JimmyT, here is a link to a Scientific American article from 1998, which describes the problem. The book I mention in my previous post also ties Chinese and Indian energy consumption curves to the info in the SciAm article to find that soon, oil will become so expensive it may break down the world economy.

    http://dieoff.org/page140.htm

    We aren’t running out of oil. We are just using it way too fast, and we have crossed over the peak of world total production. We will have to take drastic steps to just survive peacefully until focus fusion and/or other similar projects come to fruition. That is why this project is so important, why this website is important, and why the people working on the project are very important.

    One other consideration is man-made, CO2-based global warming. If it is true (there is still debate) then it needs to be worked on now. Anything we do to offset the increases in crude oil use in the growing economies in Asia needs to not add to the CO2 problem.

    #2714
    AvatarJimmyT
    Participant

    Looks to me like we agree on virtually everything.

    I’ve read every issue of Scientific American for the last 40 years.

    The only thing I disagree with in the above thread is the environment of hysteria and despair.

    And yes, I think there is considerable room for debate as to the validity of man made global warming. Unfortunately it has become a political issue not a scientific one. One ruled by political correctness and whines of consensus.

    The ice caps are melting on Mars too.

    #2716
    AvatarGlenn Millam
    Member

    JimmyT wrote: The ice caps are melting on Mars too.

    Hence the debate about it being man-made global warming. But, its like John McCain has said, if we get off fossil fuels and it didn’t cause global warming, then we’ll have cleaner air, and fewer oil dictators funding extremists.

    #2742
    AvatarJimmyT
    Participant

    In my humble opinion here’s why I think the question of man made global warming is important:

    Whether it is a fact or not many of our responses should be the same. Development of DPF power is on the top of my list. There are all kinds of reasons to do this. Other environmental reasons not related to global warming; economic reasons; global security reasons; standard of living reasons; etc. etc.

    Other responses probably would share this trait. We should probably continue to pursue solar and wind and geothermal and tidal power and fission options Just in case DPF doesn’t work. (I’ll let someone else fund those.)

    But some responses are not the same. If man made global warming is not a fact, then we should be aggressively pursuing all the petroleum and other fossil fuels that we can. We should drill in ANWAR. We should drill off the continental shelf. We should continue research into methane hydrate deposits. All this to get us by until, hopefully, DPF comes on line. Because we really don’t know how long this is going to take. Even assuming it is going to work.

    But if CO2 produced by human activities is contributing significantly to global warming. And we decide that this is undesirable. And we decide it’s impact is going to be significant enough in the near enough future to be worth the cost of avoiding its production. Then maybe we shouldn’t be pursuing the production of fossil fuels. At least maybe we should be pursuing some of the other options more aggressively.

    The costs of this avoidance are very large. These high costs imply a high human toll. I don’t think the “just in case” argument works due to this factor. And there are some who take this “just in case ” position.

    #2797
    AvatarBrian H
    Member

    JimmyT wrote: In my humble opinion here’s why I think the question of man made global warming is important:

    Whether it is a fact or not many of our responses should be the same. Development of DPF power is on the top of my list. There are all kinds of reasons to do this. Other environmental reasons not related to global warming; economic reasons; global security reasons; standard of living reasons; etc. etc.

    Other responses probably would share this trait. We should probably continue to pursue solar and wind and geothermal and tidal power and fission options Just in case DPF doesn’t work. (I’ll let someone else fund those.)

    But some responses are not the same. If man made global warming is not a fact, then we should be aggressively pursuing all the petroleum and other fossil fuels that we can. We should drill in ANWAR. We should drill off the continental shelf. We should continue research into methane hydrate deposits. All this to get us by until, hopefully, DPF comes on line. Because we really don’t know how long this is going to take. Even assuming it is going to work.

    But if CO2 produced by human activities is contributing significantly to global warming. And we decide that this is undesirable. And we decide it’s impact is going to be significant enough in the near enough future to be worth the cost of avoiding its production. Then maybe we shouldn’t be pursuing the production of fossil fuels. At least maybe we should be pursuing some of the other options more aggressively.

    The costs of this avoidance are very large. These high costs imply a high human toll. I don’t think the “just in case” argument works due to this factor. And there are some who take this “just in case ” position.

    Lots to agree and disagree with here. CO2 has about 5% of the influence of water vapour in the atmosphere. How ’bout a campaign to limit H2O pollution? And, geologically, CO2 spikes TRAIL global temperature spikes by about 800 years. Very paradoxical causal chain there, don’t you think?

    Anyhoooo… FF answers all. It truncates the need for new, or even most existing, oil pumping. (Including and especially ANWAR, which is a short-term, expensive, and relatively trivial source.) It permits transportation and heating without pollution, and even makes massive remediation economical. Peak Oil may be real, but it is/should be irrelevant if/WHEN FF succeeds. IMO, this is the most important extant project and development on the planet, bar none.

    #2811
    BreakableBreakable
    Keymaster

    Peak oil is already occurring.
    Take a look at oil production and oil consumption number for the last two ears.

    #2816
    AvatarBrian H
    Member

    Breakable wrote: Peak oil is already occurring.
    Take a look at oil production and oil consumption number for the last two ears.

    Maybe, maybe not. The price runup has been so fast that the exploration and drilling markets have not had time to react. The Bakken field and others could add 10’s of millions of bpd production once exploited.

    #2954
    BreakableBreakable
    Keymaster

    Some interesting points here:
    http://marketveda101.blogspot.com/2008/06/what-mr-crude-oil-sees-ahead.html

    Basically oil producers do not want the production to catch up with consumption. As a result we have artificial peak oil.

    #2976
    AvatarBrian H
    Member

    Breakable wrote: Some interesting points here:
    http://marketveda101.blogspot.com/2008/06/what-mr-crude-oil-sees-ahead.html

    Basically oil producers do not want the production to catch up with consumption. As a result we have artificial peak oil.

    I saw the observation elsewhere that after the ’81 oil price spike it took 5 years for new supplies to come on line.

    I almost pity the oil explorer/driller/developer companies; just as their multi-billion dollar investments are coming on line, FF will render them virtually worthless. So sad! :down: :ohh:

    #2979
    BreakableBreakable
    Keymaster

    Brian H wrote:
    I saw the observation elsewhere that after the ’81 oil price spike it took 5 years for new supplies to come on line.

    I almost pity the oil explorer/driller/developer companies; just as their multi-billion dollar investments are coming on line, FF will render them virtually worthless. So sad! :down: :ohh:

    So think what would they do to stop it?

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