Energy Security

[Rick M]

Hi, Steve

Thanks for your latest detailed observations, and I’m sorry that I still have not responded to all of your ideas in your previous posting.
We’ve finally had a break in the rain so I’ve been busy at the hay.

I’ll take your points in order:

1. The Oil Drum
I don’t like their lay-out… vertical with wide sidebars, hard to read because the reader is forever scrolling up & down… hard to work with.
I also don’t like the fake names, but I’ve come to learn that it’s necessary for some of the most knowledgeable contributors to remain anonymous, so that aspect no longer bothers me.
Personally, I prefer Energy Bulletin which prefers sourced info and a standard wide format in terms of presentation.
But TOD has some excellent info from credible analysts: please examine this one on export decline and let me know if there is something you are skeptical of:
http://europe.theoildrum.com/node/4179

I have no answer to the gap between what the mainstream analysts say (the three that you mentioned, plus I would add CERA and some but not all industry officials) and what the PO analysts say.
Personally, I find almost all of the main PO analysts to be credible.
Simmons is an industry insider, has done the annual forecasts for World Oil journal for many years, etc…. it’s hard to imagine that he needs book money, nor how his up-front concerns could possibly help his company win contracts.
I think the guy deserves a medal.

Likewise Bob Hirsch…. it appears that doing the research for the 2005 paper has become a bit of a life-changing wake-up call. He and Bezdek continue to push on this issue.

Meanwhile, both industry spokesmen and senior bureaucrats have many good reasons to express a “no foreseeable problem” message.
The recent WEO was a major step for the IEA but I was stunned to discover four months later that my country’s lead ministry had not shifted its position to reflect the IEA’s sudden worries. The ministry still say that “there are no imminent peak oil challenges” and that “Canada’s oil supply is secure for about 200 years.”

2. peak in 2005-08
I agree with your points, but the PO analysts have always said that we can only know from the rear-view mirror, well after the peak has occurred.
And price volatility may be worse than steady high prices since the dips subvert the efforts to bring along the next-generation liquid fuels, which sustained high prices would foster.

3. Price volatility
You may be reading too much into what I had said.
Like yourself, I am not convinced that we are at peak, though I do think we are so close that it barely worth debating, especially if we examine it from a net-energy perspective.
Is there enough oil in the ground to get over 90 mbpd? Certainly.
Will we ever see the 130 that was talked about only a few years ago? Not even close.
But how much physical energy and how much additional financial investment will it take to get us over 90?
I believe that nearing the apparent peak will cause volatility of both price and supply, but volatility alone is no proof of peaking..

4. the 2008 price spike
I agree with your three points, including the third (speculation).
The recent talk about limiting speculation on oil (same as limits re food-grains) could be helpful in containing the next spike.

5. fuel emergencies
As for your final paragraph, I agree completely, and please remember what I indicated in the previous post… my own thinking has shifted considerably over the years, from
1. becoming aware of PO and viewing it as a legitimate and overlooked concern, to
2. recognizing that pricing and export decline would be more imminent issues, especially for import-dependent regions, to
3. my current focus on government plans for fuel emergencies.
I view the stresses caused by a real (or even an apparent) peak as likely to precipitate an event which then trips a fuel crisis (rather like the shot at Sarajevo in June, 1914 which sparked WWI, meanwhile pressures had been building for years).

Meanwhile, when I began to enquire about fuel emergency plans, it became clear that this is a grossly overlooked area, especially here in North America.
It was then that I contacted the military (in my country and in several other countries), believing that this is a neglected matter of internal national security.
The military/security issues would be external as well, of course, but they have been widely acknowledged & discussed.
It’s the threat to domestic social order that so few are willing to address.

Hence the Energy Security thread on this site and at Armed Forces Journal.
Hence also two postings which I expect will be posted at Energy Bulletin within the week, both of which examine studies by US military analysts.
They will be posted here as well.

6. the export decline video
Sorry, I don’t have a transcript.
But Brown’s theory is illustrated & examined on the Oil Drum link (above).

I greatly appreciate your insights on this vital topic, Steve
--rm