4 sobering paragraphs on oil

From: Glenn Morton (glenn.morton@btinternet.com)
Date: Wed Jan 24 2001 - 13:40:24 EST

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    Three paragraphs from an economist William E. Rees, "Revisiting Carrying
    Capacity: Ara-Based Indicators of Sustainability," Population and
    Environment 17(1996):3:195-215

    "But there is another issue at hand. The world is running out of
    conventional oil. Recent price hikes are mere tremors heralding the real
    price shock to come. Surely this is not the time to be deepening our
    dependence on fossil fuel."

    "The evidence? Oil ‘production’ (i.e., extraction) in the US peaked around
    1970 and in North America as a whole in 1984. Non-OPEC production is peaking
    even as you read these words. Several recent studies project global oil
    production to peak by 2013 or sooner, possibly as soon as 2007. Even the
    necessarily conservative International Energy Agency (IEA) in its World
    Energy Outlook, 1998 concurred for the first time that global output could
    top out between 2009 and 2012 and decline rapidly thereafter. Indeed, the
    IEA projects a nearly 20% shortfall of supply relative to demand by 2020
    that will have to be made up of from “unidentified unconventional” sources
    (i.e., known oil-sands deposits have already been taken into account). Other
    studies show that by 2040 total oil output from all sources may fall to less
    than half of today’s 25-26 billion barrels of oil per year." [in 2000 we
    produced over to 28 billion barrels of oil--grm]

    "And running out of oil is not running out of just oil. Oil is the means by
    which industrial society obtains (and over-exploits) all other resources.
    The world’s fishing fleets, its forest sector, its mines, and its
    agriculture all are powered by liquid portable fossil fuels. Seventeen
    percent of the US energy budget, most of it oil, is used just to grow,
    process, and transport food alone. (It takes a gallon of fossil fuel to feed
    each American every day.) Keep in mind, too, that petroleum is not just a
    fuel. Oil and natural gas are the raw material for thousands of products
    from medicines, paints, and plastics to agricultural fertilizers and
    pesticides. Since oil is directly or indirectly a part of everything else
    the coming scarcity of oil and the attendant price shock means higher prices
    for everything else as well."

    "But wait a minute. Many analysts will agree with energy economist M.A.
    Adelman that rising prices will stimulate “..a stream of investment
    [creating] additions to proved reserves, a very large in-ground inventory,
    constantly renewed as it is extracted”. Unfortunately, this argument is
    dangerously misleading. The physical stock of exploitable oil is not being
    “renewed”; historically, improved technology has simply made a dwindling
    finite resource more accessible. Abundant short-term market supplies then
    effectively short-circuit the price increases that would otherwise signal
    impending real scarcity, even as finite stocks are depleted."

    glenn

    see http://www.glenn.morton.btinternet.co.uk/dmd.htm
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