Wall Street Succumbs to Peak Oil

Peak oil

Peak oil be here, folks. We use 30% more oil per capita than the next largest world user. That's huge. One way the US can continue maintaining a stable supply is to fake evidence that a weak country with a lot of undeveloped oil is developing weapons of mass destruction and unilaterally attack it, against the advice of the other large oil using countries and trading partners. If we did this, and did end up controlling the weak country's oil production and sales, we would take "first dibbies" on purchase of the oil output. Plus we still pump 32% of our own oil needs puts us in pretty fair shape for a long time.

The other biggest world users, the EU and soon China, however, would rightly feel endangered by this and try to cause us to fairly share the world's remaining oil. They could begin by negotiating with us to continue to let all oil to be sold to all comers at the same price. One fairness issues is how to solve the great differences between our vastly higher per capita use of oil resulting in the US, with 4% of the world's population, using over 25% of the world's daily oil consumption. Another issue to negotiate is that the EU has very high fleet mileage standards and taxes on oil relative to us.

If negotiations didn't work, the EU and China might begin programs of cashing in the trillions of dollars of US debt they hold, crushing the dollar, pushing the US into a depression, ending our world wide adventures like Iraq and Afghanistan, closing our overseas military bases, and pushing the price of oil bought in dollars to several times the price in euros.

We sit out here in the Western Hemisphere with 300 million people, while the EU has 425 million people and a larger GDP than the US. China has 1.4 billion people and a skyrocketing GDP. They both sit on the Eurasian land mass where the majority of world economic action takes place. If we still wouldn't share remaining oil equitably, they might militarily attack and defeat us and then force us both to tax oil and lay on mpg standards in parity with the rest of the world, plus pay them reparations for the costs of their military action. I think I'll vote for high US mpg and gas taxes now, plus no more overseas adventures and full cooperation with the EU and China in finding equitable solutions to sharing remaining world resources.

TINA of CA @ May 28, 2008 11:15:38 AM

Peak Oil is a catastrophe

Peak Oil is a catastrophe. I have put together all of the best scientific and government reports together in this free report: http://www.peakoilassociates.com/POAnalysis.html

Clifford J. Wirth of NH @ May 26, 2008 22:37:09 PM

peak oil

ausra, a solar start-up based in silicon valley via australia is already producing power @ 10 cents per kwh. PG&E in california and FPL group in florida are currently building 1000mgw and 500mgw plants, add clean coal, shale oil, tar sands,algae oil, nuclear and wind, along with localised production of goods,high speed rail, end of the suburbs, plug in electric cars, no more supply lines from china, and ,voila ,global warming (if it exists) declines, sell your wall-mart stocks.in the long run we end up with a cleaner, greener, more beautiful and cohesive country. The sooner we look forward,instead of back, the sooner we will reap the benefits. This is no time to be myopic and reactionary. we've wasted enough time,blood,and treasure protecting the status quo, which no longer exists anyway.

twistedtreejosh of HI @ May 26, 2008 01:10:05 AM

Peak oil and the U.S. military

U.S. Military Launches

Alternative-Fuel Push

Dependence on Oil

Seen as Too Risky;

B-1 Takes Test Flight

The U.S. military consumes 340,000 barrels of oil a day, or 1.5% of all of the oil used in the country. The Defense Department's overall energy bill was $13.6 billion in 2006, the latest figure available -- almost 25% higher than the year before. The Air Force's bill for jet fuel alone has tripled in the past four years. When the White House submitted its latest budget request for the wars in Iraq and Afghanistan, it tacked on a $2 billion surcharge for rising fuel costs.

Just as important, the military is increasingly concerned that its dependence on oil represents a strategic threat. U.S. forces in Iraq alone consume 40,000 barrels of oil a day trucked in from neighboring countries, and would be paralyzed without it. Energy-security advocates warn that terrorist attacks on oil refineries or tankers could cripple military operations around the world. "The endgame is to wean the dependence on foreign oil," says Air Force Assistant Secretary William Anderson.

Some Pentagon officers have embraced planning around the "peak oil" theory, which holds that the world's oil production is about to plateau due to shrinking resources and limited investment in many of the most oil-rich regions of the Middle East. Earlier this year, they brought Houston investment banker Matthew Simmons to the Pentagon for a presentation on peak oil; he warned that under the theory, "energy security becomes an oxymoron." House Democrats have proposed creating a new Defense Department position to manage the military's overall energy needs.

The Pentagon is hoping its push for alternative energy will feed civilian applications as well. For synthetic fuel, the Air Force is working with aircraft manufacturers such as Boeing Corp. and the Pratt & Whitney engine unit of United Technologies Corp. North American synthetic-fuel processors including Rentech Inc., Baard Energy and Syntroleum Corp. all operate or hope to build synthetic-fuel refineries to feed the military's growing thirst.

"Our goal is to drive the development of a market here in the U.S.," says Mr. Anderson.

Military use of synthetic fuel faces significant obstacles. The energy bill signed into law by President Bush last year included a clause preventing the government from buying the fuel if it emits more pollution than petroleum.

But many in the field say they're unwilling to invest the necessary billions until they can sign long-term contracts with the government. Right now, the Air Force legally can sign deals only for five years. It has asked the White House's Office of Management and Budget to seek congressional approval for the rule channge, but the Bush administration has yet to act on the request, Mr. Anderson says.

"These plants are not likely to

http://online.wsj.com/article_email/SB121134017363909773-lMyQjAxMDI4MTIxMTMyNDEwWj.html

Waiting Forchange of KS @ May 24, 2008 13:44:47 PM

Price of Oil has not changed

There is a chart at http://www.RunToGold.com that shows the price of oil in terms of gold, dollars and euros. Using the dollar or euro to perform mental calculations of value because they are synthetic commodities that are illusions and have no basis in reality. The price of oil in terms of gold has not changed much in the last 70 years but oil has gotten noticeably more expensive in terms of gold over the past 6 years. That tends to lend credence to the fact that cheap oil is no longer available. Thus, Peak Oil is probably upon us.

RunToGoldDotCom of CA @ May 24, 2008 11:59:33 AM

Doh!

Look in the mirror. Collectively, the American people have voted in the government we wanted. We didn't want to drill for our own oil in ANWR, or off the coast of California or Florida. We didn't want to build any more refineries or nuclear power plants. We will not pay higher gasoline taxes to help curb demand. We won't require auto makers to build flex fuel vehicles. We will not lower our speed limit. Politicians are just weeds blowing in the wind. They do what we tell them to do.

Richard of OH @ May 24, 2008 06:48:21 AM

Peak Oil and Demand

Hi.

Will keep this brief.

Actually, voted that the current run-up is due to speculation, largely due to investors flooding into commodities since the Fed devalued the dollar to save the big investment banks that would have been subject to major losses if the proportion of defaults on mortgage loans would have been as great as if the Fed had not cut the interest rates so much.

The effects of Peak Oil on the market will follow within a few years.

Anyway, to a first linear approximation, the current coefficient of demand elasticity for gasoline in America is such that prices have to go up 14% for demand to go down 1%. Have read (in Time mag etc) that if the entire US crop-land was devoted to bio-fuels, then that would satisfy 20% of current gasoline demand in this country.

Thus to remove 80% of gasoline demand, oil prices would need to go up about 1120% so gasoline would have to go up as follows: $4/gallon * 11.2 = $44.80.

That should do the trick within the next 40 years or so.

of @ May 24, 2008 01:23:25 AM

We Told You So

When I first came upon Peak-Oil "theory" three years ago I was a skeptical as any of the naysayers I've seen since then. However, as the issue was of such importance I decided to really check every aspect of the pro and con arguments - which is maybe a lot easier to do if you have the petrochemical engineering background I have. I was stunned by the amount of verifiable information available and very quickly joined the ranks of those trying to warn everyone of the consequences likely in the very near future. But I was even more stunned to find such a huge amount of dismissive propaganda from those who should really know, including CERA, the IEA and a broad swathe of economists. It was very disheartening.

I've now become something of a survivalist - joining a group of nutcases I would've once ignored out of hand - as I believe that the future is now unstoppable and no amount of conservation or effort will delay the inevitable. We have reached the pinnacle of energy availability and the limits to growth are everywhere, which is why I suspect many economists are still apoplectic over the concept of peak anything; the backbone of all economics being the infinite expansion of investment and return.

There is very little I can say about peak-oil gaining recognition and acceptance and any joy from saying "I told you so" is lost after considering the possible reactions the general public will display when they realise their modern way of life is about to reverse direction and the politics of expansion are replaced withe the realities of permanent decline.

p.s. the state I chose is that of my first wife, I'm an Australian and do not live anywhere in America where the doo-doo is really going to hit the fan.

William Jorgensen of CA @ May 23, 2008 23:28:49 PM