Category: Peak Oil

A world without crude oil is almost unthinkable. And yet, there are indications that such a transition is happening. OPEC is jockeying for market share. Russia is increasing production and US tight oil producers as well as their Canadian oil sands counterparts have found themselves priced out of the market. So what is going on? As humans, we tend to like to place things in neat little boxes. So we look at coal and natural gas and think electricity generation. We look at crude oil and think transportation sector. And all this is correct. But trends are emerging that are likely to turn this on its head. For instance, on shore wind and solar are gaining traction as viable energy production means. Costs are falling rapidly and Lazard now estimates that onshore wind is the cheapest provider of electricity on a levelized cost basis. Solar is not far behind […]

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Very slowly, environmentalists have begun to convince the world we can have our cake and eat it too. They argue human civilization can transition away from fossil fuels without suffering a significant blow to the global economy. Capitalism, continual growth, and high standards of living can all continue, and continue without the onset of catastrophic climate change. We can transition to renewable sources of energy such as solar, wind, and hydro—which, in recent years, have become substantially more economically viable. And that allow us save the planet while continuing to update to the latest iPhone each year and without forgoing the annual vacations in Hawaii. But Richard Heinberg argues this optimistic future is a fantasy. It is absolutely imperative that the world does move away from fossil fuels, he maintains. But it is not going to happen without severe economic sacrifice, political upheaval, and a “simplification and decentralization of […]

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The recent oil price crash signals the impending demise of the oil and gas industry as a major world energy producer. That should be a good thing, in principle, but something wicked may still come out of the process. With the ongoing collapse of the oil prices, we can say that it is game over for the oil and gas industry, in particular for the production of “tight” (or “shale”) oil and gas. Prices may still go back to reasonably high levels, in the future, but the industry will never be able to regain the momentum that had made its US  supporters claim “energy independence” and “centuries of abundance.” The bubble may not burst all of a sudden, but it surely will deflate. So, what’s going to happen, now? The situation is, to say the least, “fluid”. A great rush is ongoing to convince investors to place their money […]

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The recent oil price crash signals the impending demise of the oil and gas industry as a major world energy producer. That should be a good thing, in principle, but something wicked may still come out of the process. With the ongoing collapse of the oil prices, we can say that it is game over for the oil and gas industry, in particular for the production of “tight” (or “shale”) oil and gas. Prices may still go back to reasonably high levels, in the future, but the industry will never be able to regain the momentum that had made its US  supporters claim “energy independence” and “centuries of abundance.” The bubble may not burst all of a sudden, but it surely will deflate. So, what’s going to happen, now? The situation is, to say the least, “fluid”. A great rush is ongoing to convince investors to place their money […]

Click here to view full article at peakoil.com

Enlarge Credit: Jm Verastigue/public domain Researchers report that as the world population increases and food demand has grown, globalization of trade has made the food supply more sensitive to environmental and market fluctuations. This leads to greater chances of food crises, particularly in nations where land and water resources are scarce and therefore food security strongly relies on imports. The study assesses the food supply available to more than 140 nations (with populations greater than 1 million) and demonstrates that food security is becoming increasingly susceptible to perturbations in demographic growth, as humanity places increasing pressure on use of limited land and water resources . "In the past few decades there has been an intensification of international food trade and an increase in the number of countries that depend on food imports ," said Paolo D’Odorico, a professor of environmental sciences at the University of Virginia and one of […]

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History has been so fascinated with oil and its price movements that it is indeed hard to imagine our future without oil. Over the last few months, we have witnessed how oil prices have fluctuated from a 6 year low level of $42.98 per barrel in March 2015 to the current levels of $60 per barrel. It is interesting to note that, in spite of the biggest oil cartel in the world deciding to stick to its high production levels, the oil prices have increased mainly due to falling US crude inventories and strong demand. However, the current upward rally might be short lived and there may yet be another drop in the international oil price when Iran eventually starts pumping its oil into the market at full capacity, potentially creating another supply glut. In these endless price rallies, it is important to take a holistic view of the […]

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The green energy movement in America is dead. May it rest in peace. No, a majority of American energy over the next 20 years is not going to come from windmills and solar panels. One important lesson to be learned from the green energy fad’s rapid and expensive demise is that central planning doesn’t work. What crushed green energy was the boom in shale oil and gas along with the steep decline in the price of fossil fuel that few saw coming just a few years ago. A new International Energy Agency report concedes that green energy is in fast retreat and is getting crushed by “the recent drop in fossil fuel prices.” It finds that the huge price advantage for oil and natural gas means “fossil plants still dominate recent (electric power) capacity additions.” This wasn’t supposed to happen. Most of the government experts–and many private investors too–bought […]

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The Wall Street Journal recently ran an article called, Glut of Capital and Labor Challenge Policy Makers: Global oversupply extends beyond commodities , elevating deflation risk. To me, this is a very serious issue, quite likely signaling that we are reaching what has been called Limits to Growth , a situation modeled in 1972 in a book by that name. What happens is that economic growth eventually runs into limits. Many people have assumed that these limits would be marked by high prices and excessive demand for goods. In my view, the issue is precisely the opposite one: Limits to growth are instead marked by low prices and inadequate demand . Common workers can no longer afford to buy the goods and services that the economy produces, because of inadequate wage growth. The price of all commodities drops, because of lower demand by workers. Furthermore, investors can no longer […]

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This is the cleft stick within today’s global energy supply: too little ‘cheap energy’ to enable economic growth, too low a return on capital to allow investment in higher production. A few weeks ago tremors rocked the world of ‘fracking’ in the USA – though few heard them. The US Energy Information Agency (USEIA) had issued its latest Monthly Drilling Report and the news was not good. It wasn’t simply the economic failure of fracking (covered in The Ecologist last December ) and the subsequent collapse in drilling ( covered in January ). The news from the USEIA was far more grim for those who understood its deeper meaning. Their press release was very matter-of-fact: “EIA’s most recent Drilling Productivity Report (DPR) indicates a change in the crude oil production growth patterns in three key oil producing regions… The DPR estimates include the first projected declines in crude oil […]

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