Greenwashing won't get us over this Peak

Leslie Carlson

The financial press was all a-twitter last week with worries about rising oil prices. Not just rising prices, but the possibility that "world oil supplies may not be able to keep up with future demand, a situation that could potentially lead to even higher prices," as it was reported in the New York Times.

Hmmm...does that sound like Peak Oil to anyone else out there?

All the financial worry--and the pain being borne by companies like Ford Motors and American Airlines, while regrettable, certainly could have been predicted. Unfortunately, despite the fact that we've known for years that oil is a "finite resource," we haven't been able to wean ourselves enough from it, nor have we planned for a future without oil. Thus, we have no real energy policy other than fighting over the last few oilfields remaining to us.

Of course, some lawmakers out there are taking the first steps towards creating an energy policy. One such effort was the recently passed Renewable Energy and Job Creation Act of 2008, which marries reducing our dependence on oil with creating green jobs.

Probably the most exciting part of HR 6049 was its focus on rural areas, and the incentives that it provides to rural farmers and ranchers who rent out their land for windpower turbines. I love the idea of putting turbines on working farms and ranches, because it provides monthly income to farmers, and allows them to keep on farming at the same time. As someone described it to me, "it's a win-win-wind."

Unfortunately, one member of Oregon's House delegation, Greg Walden, didn't vote for HR 6049. I'm not sure if he's against windpower, incentives for renewable energy, farmers or ranchers, or just this particular bill. But's in an odd vote for a man who's long touted himself as a friend to rural Oregonians.

Let's hope the rest of the delegation stands strong in their support of renewable energy in upcoming votes. We don't have time to wait around for $5- or even $10-a-gallon gasoline.

  • Katy (unverified)

    On my way to work this morning I was stopped behind a gigantic truck with a bumper sticker that read "Nuke their ass and take their gas." Ugh.

  • Miles (unverified)

    I'm sure the renewable energy legislation is good public policy. However, I've long thought that the only way to convince an entire country to change its habits quickly is by harnessing the power of the market. For years liberal economists argued that a $1 or $2 a gallon gas tax is the best way to 1) reduce our reliance on oil and 2) rebuild our infrastructure at the same time. Now, we're paying that much but it's going mostly to foreign governments instead of our own.

    But the upside (although no politician can actually acknowledge the upside) of high gas prices is that people are rapidly changing their habits. They're driving less, buying smaller cars, walking, biking, turning off the lights, etc. Four dollar gas is changing people's habits faster than any government program ever could.

    This is one time we should thank the market, and look for future ways to harness that incredible power.

  • Urban Planning Overlord (unverified)

    Actually, there's plenty of oil swimming around out there, whether it be in standard fields, the Athabasca Tar Sands, liquefied coal, or whatever. It's just more costly to produce, and now that the price of oil is high, it will be produced to meet demand. "Peak Oil" won't be truly with us for several generations.

    There is, of course, a more important reason to reduce petroleum usage - carbon emissions and global warming. Unfortunately, our built environment has been based upon personal automobile usage, so there needs to be a three-pronged strategy:

    1. Increase quantities of alternative forms of energy, not only wind and solar energy but also nuclear power.

    2. Continue research into alternative power sources for personal vehicles, most notably the fuel cell consortium project now underway in our sister state to the south.

    3. Start redesigning our cities and towns to make use of personal vehicles an option, rather than a necessity.

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    I could live with a $1 or 2 gas tax as long as the money was invested in eliminating the use of fossile fuels from the Oregon market. But lets not stop there. Lets use the profits the electic and companies make off of Oregon to move Oregon forward into the green zone. The gas companies and the power companies are not going to allow real change in our markets as there is little profit in doing so.

  • Oil Junkie (unverified)

    The lack of oil is because of the the Congress unwilling to allowing the drilling for oil, not because the Earth is not producing oil faster than it's consumed.

    There's plenty of oil underground - it's just not popular, or allowed - to get it.

  • joel dan walls (unverified)

    The peak is of course only identifiable in retrospect, but I am assuming for purposes of personal life planning that the peak is upon thus. This affects the way I think about MANY things.

    By the way, the peak in domestic production was predicted quite correctly a long time ago. One way or another, oil is a finite resource. It's unfortunate that economists and politicians do not even acknowledge this. (I'll venture that nearly every geologist took an economics course or two, but that precious few economists and political science majors ever studied geology.) Even when you look at the detailed commentaries by economists like Paul Krugman, you don't see anything about the scientific and technological issues; you just see those dry econometric data and supply/demand curves, all predicated on the assumption that oil is an infinite resource.

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    The peak is of course only identifiable in retrospect, but I am assuming for purposes of personal life planning that the peak is upon thus.

    Interesting assumption, Joel, and one that I've also integrated into my life, but more because I've been trying to reduce my carbon footprint.

    But a funny thing happened along the way...our family no longer feel the "oil shocks" so deeply due to some lifestyle changes (biking, taking the bus, growing produce in our garden, buying recycled or vintage goods, walking our kids to school, etc.).

  • Jonathan Radmacher (unverified)

    Uh, "Oil Junkie," shouldn't your name really be "Big Oil Lackey?"

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    I've read and heard the Peak Oil mantra, and I'm a) not convinced and b) don't think it's the way to sell conservation.

    The problem with relying on the peak oil theory is that it is only the most recent theory de jour of why population growth and non-renewable resources will create a crisis. The problem is that the skeptics can point to the same dire warnings in decades past, each of which we've outpaced via technological development.

    I've read just as convincing arguments that oil price spikes are a consequence of a) surging demand in India and China combined with lack of refining capacity, b) political uncertainties in Nigeria, Venezuela, and Iraq, and c) a flood of money into commodities from private equity / hedge funds.

    Does this mean I'm anti-conservation? Not at all. But I think a MUCH easier sell to the American public is a simple, perhaps distasteful, but powerful self-interested one: if we remove our dependence on foreign oil, we strengthen our economy and strengthen our position vis a vis our economic competitors.

    It's the same outcome that you want.

  • joel dan walls (unverified)

    Paul G.--we are not dealing with an either/or proposition, but rather both/and...or perhaps better said, short-term and long-term factors. Short-term factors driving up world oil prices now arguably do include those issues you mentioned: Asian demand, political instability in producing countries, and speculators buying up oil futures owing to the weak US dollar. But oil remains a finite resource.

    US Geological Survey world oil reserve assessments make useful reading.

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    I've read and heard the Peak Oil mantra, and I'm a) not convinced and b) don't think it's the way to sell conservation.

    I agree with you. I'm not using it to sell anything either. I do believe, however, that we'd all be better served if politicians told Americans the facts: 1) oil is a finite resource and we can't rely on it forever and 2) climate change is upon us and is perhaps the most compelling reason to get off oil.

    Until our elected officials--and our society--come to terms with these truths, we'll be forever at the mercy of foreign countries who become obscenely wealthy because of our addiction and won't give us the stuff cheaper just because we beg.

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    Urban Planning Overlord,

    Assuming your name wasn't picked out of irony, how do we go about retrofitting a built environment organized around automobiles for 80 years or more, during which time the population more or less tripled and a majority of the came to live in places defined as suburbs?

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    Oil Junkie, my understanding is that drilling in ANWAR is the big issue here. Is that correct?

    It's also my understanding that ANWAR oil, under the best-case scenario, would yield enough oil to reduce gas prices by about 1ยข/gallon in about 20 years. Is that correct?

    Assuming that I understand the situation right, what exactly is your proposal? Or if I'm missing something, exactly what is it?

  • redcellpolitical (unverified)

    There is no oil shortage. There is a shortage of refined oil products and this shortage is the cause of price spikes, not some sudden realization by OPEC or commodities traders that the moment of peak oil has come, is immanent, or even predictable within two or three scales of magnitude.

    1) Oil is priced in $US. Thus when the $US is at an all time low it makes far more sense for producers to keep oil in the ground, even when prices (for us) reach $150pb. Why show a surplus on the balance sheet when the visible presence of the surplus will drive down the value of the surplus?

    2) Hedge fund argument made above.

    3) Refining capacity has gone down in the US over the last twenty years as it has become increasingly difficult to site new refineries or to expand existing ones.

    4) Hugo Chavez makes the markets very nervous. The US still gets up to 20% of its per day supply from a country that is openly hostile to the US, itself faces the threat of either a violent revolution or a violent repression, and can not maintain peaceful relations with other Bolivarian republics.

    Even if we are at, or past peak oil, most models show a 30-50 year tail. Imagine the differences in combustion technology 30 or 50 years ago now project forward by the same degree of development. There is every reason to believe that, as long as a strong price signal exists, the fuel efficiency of auto and truck fleets could quadruple; 75MPG etc. The other side is that once oil supply declines are noted the market would switch to natural gas for which there is at 100-150 years known supply at current rates of discovery-consumption and thus at least another 50 years supply if those same high efficiency combustion engines were converted to natural gas.

    No, the dwindling supply question will not be, and has not been persuasive enough to shift our consumption habits. In a year's time oil could easily be back at $80pb or lower and the mainstream push for change will die back. The argument must be made on the basis of particulate emissions and CO2 emissions.

    The problem is the very people who often argue for the widespread acceptance of plug-in electric vehicles, for instance, are often the same people who advocate curtailment of the hydro-system, want a ban on coal plants, don't trust nuclear and are opposed to the LNG terminals which will be needed to supply gas fired turbine generators. You can build all of the wind, wave and solar capacity speculated to exist and still have a net energy demand in excess of what those fuel sources provide. Where will that energy come from? Conservation? Though we have a remarkable history of conservation in the NW (enough to drive WPPS into receivership) most energy economists believe there will be only marginal increases to conservation. More over, thinking of conservation as an energy "source" is an error; conserved power can not be traded or stored, shaped to meet demand, in short it is not dispatchable. If it isn't dispatchable it is not a reliable source of energy.

  • Miles (unverified)

    we'd all be better served if politicians told Americans the facts: 1) oil is a finite resource and we can't rely on it forever and 2) climate change is upon us and is perhaps the most compelling reason to get off oil.

    I agree with this. But I also think we're leaving out one very big internal reason for reducing our energy consumption: It is the morally right thing to do.

    The left is always hesistant to make moral arguments, to our detriment. The reality is that the external argument (limited supply, global warming) only works if those external arguments continue to hold true. If we discover a new way to extract oil from hard-to-reach places and we gain a new 500-year supply, does that mean we should use oil freely? If the earth begins to naturally correct for global warming and the effects are not as bad as some predict, should we ramp up our energy usage again?

    No. Reducing our personal consumption of energy is just simply the right thing to do. We live in a wealthy country where sustenance is not our daily goal. We can afford luxuries such as biking to work, walking to the store, turning off our lights, turning down our thermostats, and driving less. It's better for us, better for the environment, and morally right. No matter what else changes.

  • PortlandGreen (unverified)

    What a dearth of misinformation and inaccurate facts.

    So many claims and very little truth. Some facts for your perusal:

    1) At current technology levels there is enough solar energy to supply all electrical demand, and transportation demand. Obviously the transportation devices are not in place yet, but electric transport is well on it's way.

    2) New technologies that will thrive as equitable amounts of capital are invested have already been discovered to generate all the power we need. Wave power (offshore) is on it's way and has the potential to power areas with less isolation (sunlight striking the surface).

    3) The Earth is NOT producing oil at a substantial rate. It has taken EONS to produce the oil reserves extant on Earth and we are without a doubt in a reductive resource state. Meaning we are taking out far more oil than is being produced.

    4) People don't change unless they have to, nor will they change by mandate. So let's not try to get everyone driving 2 seat hybrids (like myself) but let's enjoy the things we love (muscle cars) responsibly. Which means new technology, and adaptation to new situations.

    5) Venezuela has been more than gracious in it's international affairs with the US and has suffered extreme insult and antagonizing at our hands. They are not outwardly hostile. They have NEVER invaded our country or attacked our citizens. That is something the US has done over and over and over and over... while purposefully denigrating valid Democracies worldwide. Take a look in the mirror and maybe a reality check to boot.

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    If only we suffered from a dearth of misinformation ... ;->

  • Tom Civiletti (unverified)


    • The doomsayers of decades past were not wrong. They warned us in enough time to act in a way that would have avoided disaster. We did not heed them.

    • The folks who have been more right than wrong about energy believe we have already reached peak oil or will soon do so. Continued dependence on fossil fuel will have diminishing returns, as more energy is used to produce energy - it does not matter what oil costs in dollars. When it takes a BTU to produce a BTU, the oil is effectively useless as an energy source. Exploiting diffuse sources like coal and tar sands mean huge areas of the planet's surface ripped open and ruined. Any fossil fuel use leads to more atmospheric carbon dioxide and a greater risk of destroying the biosphere - think Venus or Mars.

    • The Market has not and will not lead the way. It reacts to short term and not long term conditions. It is also distorted by the interests of those who control the present, very profitable technology. Of course, these are the same interests that conspire to prevent social and political consensus on how to get out of this mess.

    • The future will not look like an alternatively fueled version of the present. That is wishful, addictive thinking. If we are smart and hard working, we may keep some of the lights on and a few of the trains running.

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    Perhaps those who are claiming that there is no looming oil supply problem should actually read the article(s) that Leslie refers to.

    The International Energy Agency, probably the most authoritative source of information about global petroleum supplies, announced last week that it was recalculating its supply forecast by conduction the first-ever comprehensive survey of over 400 oil fields across the globe, including those controlled by national governments such as Saudi Arabia and the like. They did admit, by the way, the difficulty in getting accurate information from such sources.

    The key piece of information: they strongly hinted that previous estimates of reserves might have to be lowered based on a number of factors, including the failure of high prices to attract more crude oil into the marketplace, and the current or impending decline of major fields in most of the world. Their previous estimates were used as the basis for the US government's claim that we are about 40 years away from Peak Oil right now (source: the US Energy Information Agency). They also stated that supply might not be adequate to meet demand, given trends in the latter. This news caused the market reaction that Leslie refers to herein.

    While there is doubtless some component of speculation in current pricing, no one has provided evidence that supply and demand have NOT played the major role in the current price spike. And the trends, according to many sources not employed directly by the Oil Majors, are not looking too good. That's why analysts for Goldman Sachs are forecasting $200 per barrel oil within the next 18-24 months. Whatever else you might think about that firm, they are well-run and were smart enough to avoid losing money in the credit crunch like other Wall Street firms did by the hundreds of billions. Global supply problems cannot be attributed solely or largely to lack of refining capacity, because that little tidbit refers primarily to the US,, and much of recent global demand increases are coming from the developing world, as noted.

    Anyone who thinks we (the US) can drill its way out of this mess is delusional. US production peaked in 1970 (Hubbert's Peak) and has been declining steadily since - even after the North Slope came into production. And any increases from new fields off of our coasts, or in Alaska, would be absorbed into a world market like the proverbial drop in a bucket. 84 million barrels per day (current global consumption) is an awful lot of the stuff, and demand is forecast to grow to more than 120 million barrels per day within a decade or so. Anyone want to bet that we will never see that much production?

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