Tuesday, August 29, 2006

The Emerging Reality

Here is part of a piece from Transition Culture that was published in the Energy Bulletin. It is a partial transcript of a presentation by Chris Skrebowski at the The Fifth International Conference of the Association for the Study of Peak Oil and Gas (ASPO-5) July 18-19 2006 in San Rossore, Italy.

Peak Oil and the Emerging Reality
by Rob Hopkins
Transition Culture

Decoding the figures in the new IEA report is akin to decoding the Da Vinci Code. In my work I am not a pessimist, and I observe what oil companies do, not what they say.

Peak oil is the point where further expansion of production becomes impossible. The world needs oil production flows, the consumer needs delivery flows, reserves are no use as reserves, only as flows, peak oil is when flows can’t meet required demand, this is an economic scenario.

An example is the Alaskan North Slope, once you leave the plateau of production you are always in decline.

Oil powers 80-95% of all transport, 50-75% of all oil is used for transportation, 99% of all lubrication is done with oil products, 95% of all goods in the shops get there using oil, 99% of our food involves oil or gas for fertilisers, agrochemicals, tilling, cultivation and transport.

Oil is the most important source of primary energy on the planet accounting for 36.4% of all energy. What do current high oil prices tell us? The market is saying ‘send more oil!’. Economics need a balance of supply and demand, they assume that high prices bring new demand, yet high prices have failed to bring any new supply to meet this demand.

In the Third World, high oil prices are already having a huge impact. Demand is now starting to come down to reach supply.

So why are supplies peaking?

We are not finding enough new oil. We are not developing new fields fast enough, our old fields are getting very tired. In 2005 we found 5 bn barrels, and we used 30 bn, a ratio of 6:1.


According to this year’s BP statistics, OECD production peaked in 1997, non-OPEC production peaked in 2002, North America and Mexico peaked in 2000, and are in a 19.2% decline.

While economists live in a fantasy world, we have to look at realities here.

The reality of the North Sea is that it peaked in 1999. Norway peaked in 2001. While the North Sea peaked in 2000, it is already down by 20%. The Forties field was discovered in 1975, experienced a ragged peak, and the use of enhanced recovery just led to a very small ‘tick’ at the end of the depletion curve."

Earlier last week, the hotel where I work out was full of MBAs.

They were everywhere.

Given that the worst president in the History of the USA

is an MBA,

I don't think I would fly my MBA flag that high in public.

But these folks are studying

and developing all kinds of new and creative ways to rape the planet.

I mentioned to my favorite Bartender that an MBA

is probably the "most worthless degree" you can have right now.

It presumes that growth is limitless,

that resources are infinite,

that climate change is a hoax,

that our natural environment is indestructable,

and that the market is God.

I guess for them it is.

But their reality is not the

The Emerging Reality.

And their god may well be

a cruel god.

Chris Skrebowski is the editor or Petroleum Review and is a well known speaker on peak oil.


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Anonymous Anonymous said...

I do not like your MBA generalization . I know quite a few people who hold MBAs who do not meet your discription. How did your bartender respond?

The MBA rant distracts from some interesting and thought provoking information. I wish you would focus on that info instead of taking crap shots at our useless president....I am sure he was a moron long before he got his MBA.

7:54 PM  
Blogger oZ said...

Now that you mention it, maybe not that well...

sorry you found it distracting.

I guess I let my own business education color my perspective.

thanks for the comment

8:25 PM  
Anonymous Anonymous said...

I thought your MBA "rant" was right on. The Business Community is remarkably "out of touch" with the emerging reality. MS

8:31 PM  
Anonymous Anonymous said...

super post. thanks

9:55 AM  
Blogger Step Back said...

I agree that picking on MBA's is unfair. They are just another group of specialists who revel in their tunnel visions just as much as lawyers may celebrate in theirs or doctors of medicine in theirs. None of these experts in expertise is particularly atuned to Peak Oil or it's implications.

If you must pick away at the problem, its true roots lie in our systematic glorification of the Adam Smith model where each person focuses only on his specialization, keeps his nose to the grindstone, so to speak. A Wealth of Tunnel Visions. It is because of these myopic tunnel visions that none can step back to see the bigger picture, to spot the Peak Oil tsunami rolling our way. MBA's are just part of the bigger phenomenon. Good post otherwise. If only some influential MBA's would read it and weep.

12:48 AM  
Anonymous Anonymous said...

When Oz mentioned Bush was and MBA this bartender said, "Oh, so that means he's a certified moron."
It takes less time to make a wise crack than to be insightful.
Thinking about it I'd have to say I respect dilligence and ambition these people have. I was disappointed too. Of all the conversations I overheard none of these people talked about working for themselves, now or in the future. They talked about such and such company, how it looked good on a resume, how many people are on their team, who's not pulling their weight, and how many hours they put in.
If you truely believe in Capitalism you have to see that small businesses are the bedrock of our social structure. One would also think that seeing your own business grow and develope would bring more self-fullfillment than becoming a corporate commodity.
Maybe these people don't have any new ideas. Maybe they're not taught to have them.

-furniture man

9:43 AM  

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