North Americans... have always been spoiled rotten when it comes to paying for energy, and very soon will have to start paying the consequences. As oil becomes scarcer, supply and demand will rear its ugly head. If anyone thought that 2008 prices for gas and diesel were excessive, "you ain't seen nothing."
However, it is the Indian/Chinese/Japanese bloc which should give rise to sleepless nights. This area is accelerating its oil consumption at ever increasing rates, far higher than North America, Europe and the rest of the world, but has very few oil reserves. Don't forget, when the Japanese attacked Pearl Harbor in 1941, for them it was a war to secure natural resources in the Pacific, (what US administrations now refer to as "energy security"). Will this same pattern repeat itself?
Simple morals and ethics complicate the situation...
- Why shouldn't the Chinese and the Indians increase their standards of living?
- Why shouldn't the Japanese maintain their standard, which is comparable to our own?
- Who are we to say to almost two billion of the world's population that they must remain in poverty so we can drive gas guzzling Chryslers?
However, we must remember that OPEC began as a political organisation in response to the Arab-Israeli war in 1973, and it was never its intention to be a friend to the west. The aim was to end western support for Israel by withholding oil. This led to massive oil price increases, an almost continent wide 55 mph speed limit to conserve gas, and a recession... now, Even Saudi Arabia, the world's largest single oil supplier, is starting to feel the effects of peak oil, and has to use enhanced recovery techniques to squeeze the last oil from one of its major oil fields.
Hagens... the planet may never run out of oil... Fat lot of good that'll do when it takes a barrel's worth of energy to get a barrel of oil out of the ground.
Hagens is a former vice president for both Lehman Bros. and Salomon Bros. investment firms but quit that career several years ago and last week completed his Ph.D. in natural resources studies at the University of Vermont.
Until recently, he was also editor of theoildrum.com, a website dealing with global energy supply.
Hagen pulls from those areas, and others, such as evolutionary biology, to explain why America and other developed nations are addicted to both energy and debt, and how those addictions work against our long-term good.
Hagens came to Salina at the invitation of The Resliience Group, made up of local people looking for regional solutions to coping with economic disruption, energy depletion and climate change, and the Topeka-based Great Plains Alliance for Clean Energy.
U.S. oil production peaked in 1970, Hagens said, and discovery of new supplies globally peaked in 1964; we're now pumping three or four barrels out of the ground for each new barrel discovered.
Hagens allowed that new technology can pull more oil out of fields than in the past, "but at a cost."
And, he said, that cost goes beyond mere dollars, to the point that no matter how high oil prices go, it's not worth the cost.
For example, he said, in the 1930s, the energy generated from one barrel of oil could pull another 100 barrels out of the ground. But as remaining oil became more distant, in less-accessible places, that ratio dropped, to 30-to1 in the 1970s, and to 10-to-1 in the 1990s, and "now it's even lower than that."
"There's a lot of oil there, but if it costs more than one barrel to get a barrel, you're out of gas," - Read more
Comment#1 - In next 10 years we must find 44 million BOPD – 26 million BOPD to maintain supply and 18 million BOPD to keep up with demand increases.
If you superimpose peak production on top of this demand profile using the following parameters oil prices would increase approximately 250% in real terms over next 10 years – most likely something would give far before that price level
If you want to try the china oil demand or the peak oil models for yourself using your own assumptions they can be found at Enquirica in the "Research" section.
"History, learn from it or become it" - Haase