Peak Oil and this year's heating bills

Al Gore recently gave a moving speech when he accepted the Nobel prize that was very worthy of the occasion (click here to read a transcript). While I believe that climate change is ultimately the chief moral challange for our generation, I have commented in previous posts that the peak oil phenomena will likely superseed it in the public's mind in a few years.

Well, that may actually happen this winter. I just paid for my first fuel oil tank fill-up for the winter here in the north-east part of the country - almost $900, ouch! These fuel oil costs are going to hit many people like a 2x4 across the forehead. For some unfortunate families, it will be hitting them about the same time that a substantial increases in their mortgage payments happen. Energy conservation will be pushed to the forefront of public concern. The bright side of this is that whatever the motivation, this will drive energy conservation measures that will reduce our overall carbon footprint.

Many people who criticise any attempt at responding to climate change often claim that the cost are unaffordable. In reality, most of the important first steps actually result in a net economic benefit. This will become painfully clear this winter as people are forced to deal with the escaliting heating bills. And hopefully people will realize that this is not a one year phenomena. It is the only one step near the beginning of the long term trend.

The Future Has Just Arrived

The Peak Oil phenomena has been predicted for a while now, and is expected to mark a major turning point in the history of our industrial society. Well, according to a new report just released by the German-based Energy Watch Group, Peak Oil has already occurred - in 2006. World oil production will begin to fall from this point on for the rest of humankind's existence on this planet. And the fall in production is expected to be a rather rapid 7% a year. This report is more pessimistic than others because it relies on actual production numbers, rather than estimates of the oil in left in the ground (which can be inflated for political and business reasons). Meanwhile, the demand for oil will attempt to keep rising as China and India grow their consumption rates. This report is certainly consist ant with the price of oil reaching a new peak of over $90 a barrel last week.

In addition to this news, the effects of climate change are hitting earlier than expected in the United States. Massive wild fires are devastating parts of southern California and severe draught conditions are causing major problems with Atlanta. Recent measurements of the Artic sea ice shows that it has been melting much faster than even the worst case predictions.

Add to that the chain of major economic instabilities now hitting the market in the technically bankrupt U.S. economy (see my post on Sept 2nd) .

People have been talking about these future problems for a while now. Well, it's official, the future is now here. Prepare for an increasingly exciting ride from now on.

Meanwhile, the Democrats in Congress seem to be unable to rally enough support and determination to make any major progress or for the most part provide any compelling vision. And the Republican presidential candidates are just arguing about who is the most conservative.

Another Report that we have already passed “Peak Oil”

According to a recent report ( details at http://www.csmonitor.com/2007/0806/p15s01-wmgn.htm )

The world output of oil actually already peaked in May 2005 at 74.2 million barrels a day, says Matthew Simmons, chairman of Houston-based Simmons & Company International, an investment banking firm for the energy industry…. Since then, production has fallen about 1 million barrels a day (MB/D). If that trend continues, the results for the world economy will be “so real, so devastating” that peak oil concerns will overwhelm slower-moving global warming in grabbing world attention.

Last Tuesday, the price of oil futures on the New York Mercantile Exchange set a record, rising as high as $78.40. That exceeded the previous high of $77.03 set in July 2006 at the onset of Israel’s war in Lebanon.

Oil shortages, warns Simmons, could lead to war.

"Could lead to war??" How about "Have already lead to war." The desire to have large permanent military bases in the Middle East to exercise more long term control over that area was likely one of the key motivating factors for the start of the Iraq war in 2003. I'm afraid that armed conflict over oil will be part of mankind's fate for the foreseeable future.

Is Peak Oil Here Already?

"In the next year or two the issue of peak oil may replace global warming as what we're worried about and talking about."

This prediction was recently made by Matt Simmons, Chairman of Simmons and Co. International, an independent investment bank specializing in the energy industry. Matt recently made an interesting claim that we are already at world wide peak oil production. Oil production in the future may be flat for a while and then start an inevitable decline. With demand for oil still accelerating, this will drive oil prices substantially higher, possibly reaching $300 per barrel at some point

He expects big changes in society, and if we make these changes right we'll get through this change alright. You can see Matt Simmons talk about this here.

Additional speeches from Matt Simmons are available here. Another interesting link on peak oil can be found here.