OilSupplyLimitsAndTheContinuingFinancialCrisis

a b s t r a c t
Gail E. Tverberg
Since 2005, (1) world oil supply has not increased, and (2) the world has undergone its most severe economic crisis since the Depression. In this paper, logical arguments and direct evidence are presented suggesting that a reduction in oil supply can be expected to reduce the ability of economies to use debt for leverage. The expected impact of reduced oil supply combined with this reduced leverage is similar to the actual impact of the 2008e2009 recession in OECD countries.

If world oil supply should continue to remain generally flat, there appears to be a significant possibility that oil consumption in OECD countries will continue to decline, as emerging markets consume a greater share of the total oil that is available. If this should happen, based on these findings we can expect a continuing financial crisis similar to the 2008-2009 recession including significant debt defaults. The financial crisis may eventually worsen, to resemble a collapse situation as described by Joseph Tainter in The Collapse of Complex Societies (1990) or an adverse decline situation similar to adverse scenarios foreseen by Donella Meadows in Limits to Growth (1972).

By Terry Glavin, The Ottawa CitizenJanuary 12, 2012

China is gaining control of Canada’s natural resources. Carbon bomb for the planet. Energy insecurity for Canada. Vandy

If there were a global competition for the most brazen and preposterously transparent attempt by a ruling political party to change a necessary subject of national debate with alarmist distractions and hubbub, the Conservative escapade engineered in Ottawa these past few days really deserves some kind of grand prize.

First it was Prime Minister Stephen Harper himself, carrying on about some sort of conspiracy involving jet-setting American radical billionaire eco-saboteurs who are intent upon blocking Canada’s vital bitumen semi-fluids by ambuscading the Enbridge pipeline hearings that began this week in the Haisla village of Kitimat on British Columbia’s north coast.

Then Natural Resources Minister Joe Oliver got in on the act. “These groups threaten to hijack our regulatory system to achieve their radical ideological agenda. … They use funding from foreign special interest groups to undermine Canada’s national economic interest.” A problem: when he went dredging around for evidence, Oliver came up with a two-month delay in approving some skating pond in Banff National Park. Then he tried backtracking. He’d suddenly found himself keeping company with conspiracy theorists who like making dirty insinuations about Ducks Unlimited. You had to feel sorry for the guy.

But if we’re seriously supposed to be going all villagers-with-torches about foreign outfits with weird ideologies undermining Canada’s national economic interests, let’s review what’s really going on, shall we?

The $5.5-billion Enbridge pipeline project is all about sending Alberta bitumen in huge oil tankers to China. Beijing’s own state enterprises are among the project’s major backers, and Beijing has been buying up Alberta’s oilpatch at such a dizzying pace lately it’s hard to keep up. In the spring of 2010, China’s state-owned Sinopec Corp. took a $4.65-billion piece of Syncrude. Then the China Investment Corporation, which is run by the Chinese Communist Party, took possession of a $1.25-billon share of Penn West Petroleum. Last summer, the Chinese National Offshore Oil Corporation gobbled up Opti Canada for $2.34 billion. And so on. Read the complete Post.

Wednesday, December 07, 2011

John Michael Greer

http://thearchdruidreport.blogspot.com/2011/12/what-peak-oil-looks-like.html

There are times when the unraveling of a civilization stands out in sharp relief, but more often that process makes itself seen only in the sort of scattered facts and figures that take a sharp eye to notice and assemble into a meaningful picture. How often, I wonder, did the prefects of imperial Rome look up from the daily business of mustering legions and collecting tribute to notice the crumbling of the foundations on which their whole society rested?

Nowadays, certainly, that broader vision is hard to find. It’s symptomatic that in the last few weeks I’ve fielded a fair number of emails insisting that the peak oil theory—of course it’s not a theory at all; it’s a hard fact that the extraction of a finite oil supply in the ground will sooner or later reach a peak and begin to decline—has been rendered obsolete by the latest flurry of enthusiastic claims about shale oil and the like. Enthusiastic claims about the latest hot new oil prospect are hardly new, and indeed they’ve been central to cornucopian rhetoric since M. King Hubbert’s time. A decade ago, it was the Caspian Sea oilfields that were being invoked as supposedly conclusive evidence that a peak in global conventional petroleum production wouldn’t arrive in our lifetimes. Compare the grand claims made for the Caspian fields back then, and the trickle of production that actually resulted from those fields, and you get a useful reality check on the equally sweeping claims now being made for the Bakken shale, but that’s not a comparison many people want to make just now. Read the complete Post.

By ROBERT FROMER

Publication: The Day
Published 11/21/2011 12:00 AM

Daniel Esty, commissioner of the Department of Energy and Environmental Protection, is on record pontificating that the country and state’s “dependence on oil carries a great cost” and that “what we really need is to address the full set of energy-related problems with a focus on spurring clean energy innovation” and with imposition of “an emissions charge of $5 per ton of greenhouse gases.”

Such approaches will not solve the energy problem because the energy, which must be invested to obtain the energy produced, is high compared to fossil fuels. In addition, such a tax won’t significantly curtail energy sinning as population grows and the public believes that sufficient natural resources exist to support perpetual economic growth for society’s desired conveniences and comforts.

Commissioner Esty possesses a misunderstanding of the prominent energy issues, misleading the public by proposing simplistic solutions.

In a finite world, fossil-fuel demand and production will peak or plateau and then decline at a variable rate dependent on many factors. Globally, the most dominant factors are population growth and per-capita consumption. Read the complete Post.

H2oil animated sequences from Dale Hayward on Vimeo.

by Dr.Jim Stephenson
NSUC 13 November 2011

This article helps us understand our unwillingness to change and how and why we must.

Over the last few years I have become increasingly aware that the path of our society is not sustainable in several ways.
We won’t be able to continue as we are. Sooner or later, stuff will hit the fan.

Naturally, I set out to help my society recognize the dangers and to make the necessary changes. Employing a naive view of the political process, I wrote articles, gave presentations, and ran for political office. It was encouraging having people like Bill McKibben, James Hanson, and Al Gore helping me.

However, as time went by, I noticed that this approach was not leading to the necessary actions. Citizens were not studying the issues, considering the tradeoffs, and electing politicians to do the right thing. Most people were not interested, thought the complexity was too great, fell for the most simplistic campaign slogans, and reacted emotionally.

Intrigued by this dysfunctional behaviour, I set out to explore the ability of humans to practice foresight. After all, one of the characteristics which distinguishes Homo sapiens from other species is an awareness of the future and an ability to plan actions today which affect tomorrow. Today I will share some of my findings about this ability and its past, present, and future use. Read the complete Post.

Enbridge and Kinder Morgan each aim to pump more tar sands gunk to our coast.

By: By Rafe Mair, 14 November 2011, TheTyee.ca

View full article and comments: http://thetyee.ca/Opinion/2011/11/14/Oil-Spill-Threats/

Now that the Obama administration has delayed its decision on whether to approve the Keystone XL pipeline from Alberta’s oil sands to refineries in Texas, we had better gear up for quite a fight here in British Columbia. The pressure just rose to push through two dangerous oil sands pipeline projects running through our own province.

Before I take you through my thinking, let me address two questions I am frequently asked. Are you now a socialist? And, are you against all progress?

My answer to the first question is simple — socialism no longer exists in its original form other than in the minds of theorizing college professors. I believe in a mixed economy, a welfare state in the best sense of that term, and would be a Democrat in U.S. terms and a Social Democrat in Europe. I would be part of New Labour in the U.K.

I’ve done a lot of thinking on where I stand now and when I was in government, and I see a progression towards more social ideas but can, and do, make the case that my record in government shows a leftish tinge.

As to progress, let’s talk about this in a bit of depth, not one-liners.

I am NOT against “progress,” but say that what is and what is not “progress” has to be judged case by case. Just because it’s new and fashionable doesn’t make it progress.

To boil it down to cases, let’s look in some depth at the projected Enbridge pipelines proposal. It is two parallel lines, one carrying the tar sands gunk, known as bitumen, and the other to take the condensate, the stuff they use to transport the bitumen, back to the tar sands. Two potential disasters for the price of one. Read the complete Post.

Mon. Oct. 24, 2011
San Francisco Chronicle

This is a long article, but I think it’s worth your time to read it.
Vandy

What was the real cause of the Great Recession? More importantly, in a country accustomed to robust rebounds from burst bubbles, why is our economy stuck in neutral?

In his latest book, The Third Industrial Revolution, economist and author Jeremy Rifkin argues that the crash of the US housing market was not the proximate cause of the Great Recession, but was instead an aftershock of crude oil hitting a price of $147 per barrel oil in July 2008 – 60 days prior to the crash of the financial markets.

Mr. Rifkin makes a compelling case that our economy reached the end of the second industrial revolution in the 1980’s, and has been largely sustained by debt and the consumption of savings ever since. He argues that the kind of growth witnessed after the first and second industrial revolutions will be impossible to achieve without a third energy-communications revolution – one that leverages Internet-esque smart grids to transition from a centralized “elite” energy paradigm to a highly granular, lateral model. He contends that, as was the case with the first two industrial revolutions, the third revolution will be the foundation of the next great wave of economic growth.

Our energy infrastructure may not be the only thing that requires a rethink. In his book, Mr. Rifkin takes on Adam Smith, challenging classical economic theory with the contention that it does not take thermodynamics into account. The Third Industrial Revolution presents economic theory that incorporates entropy and the relationship between commerce and the planet. Read the complete Post.

From the desk of John Thomas
The Mad Hedge Fund Trader
Monday, October 17,, 2011

I received some questions last week on my recent solar pieces as to whether I minded paying more money for “green” power. My answer is “hell no,” and I’ll tell you why. My annual electric bill comes to $1,500 a year. Since the California power authorities have set a goal of 33% alternative energy sources by 2020, PG&E (PGE) has the most aggressive green energy program in the country (click here for “The Solar Boom in California”). More expensive solar, wind, geothermal, and biodiesel power sources mean that my electric bill may rise by $150-$300 a year.

Now let’s combine my electricity and gasoline bills. Driving 15,000 miles a year, my current gasoline engine powered car uses 750 gallons a year, which at $4/gallon for gas costs me $3,000/year. So my annual power/gasoline bill is $4,500. My new all electric Nissan Leaf (NSANY) will cost me $180/year to cover the same distance. Even if my power bill goes up 20%, as it eventually will, thanks to the Leaf, my THE total plunges to $1,980, down 56%. Read the complete Post.

Published by Falls Church News-Press on Wed, 10/12/2011 – 08:00
Original article: http://www.fcnp.com/commentary/national/10285-the-peak-oil-crisis-contagion.html
by Tom Whipple

With every passing day it is becoming more apparent that the crisis of the depletion of cheap oil has become deeply enmeshed in the European debt crises.

The sequence of events is well known. Greece’s economy is imploding; the government can no longer pay its bills without continuing bailouts from the EU; at some point Greece will have to default on at least part of the $430 billion it owes to mostly European banks. Such a default would in turn do severe damage to the viability of many major European Banks which are already suffering a liquidity shortage from the slowing global economy. It is widely believed that these problems quickly would spread to Italy, Spain, Portugal, Ireland, and now Belgium which are too large to ever be bailed out by France and Germany. Credit Default Swaps would kick in and, taken to the extreme, the world could conceivably not have much of a banking system left. Read the complete Post.