[ExI] peak oil

[Tom Nowell]

Peak oil has recently gone mainstream - Shell's CEO said that the industry faced severe difficulties if they didn't diversify, which is why they were upping their investments in wind and solar.
Peak Oil becomes mainstream according to the Financial Times
http://www.ft.com/cms/s/0/5c9d05aa-25ca-11dd-b510-000077b07658,dwp_uuid=f2b40164-cfea-11dc-9309-0000779fd2ac.html

That link mentions that people are concerned that the Saudi Arabian oil either cannot or will not be increased. Checking the wikipedia article it seems some authorities reckon the Saudi oil reserves are grossly overestimated. On the other hand, an article I read in the paper FT on Saturday mentioned that some enterprising researcher checked out the budget projections for OPEC countries and their income from oil - it turns out Iran and Venezuela *need* high oil revenues  ($60/barrel plus) to avoid going broke if they don't want to slash their programmes for economic development and poverty relief. Saudi Arabia may not be as short of cash but may see the opportunity to gain cash which they can use to by foreign investments with.
 (By the way, the wikipedia article for peak oil seems longer, and there seem to be more related articles - obviously people who contribute to wikipedia are taking this seriously too.)
 Also, Russia may not be able to provide an increase in oil:
Russia & Oil
http://www.economist.com/business/displaystory.cfm?story_id=11332313

I think Max mentioned a very important point when he said that he thought politics may be causing the current oil problem. Looking at the areas for expansion, the ongoing trouble in the Niger delta has shut down many oil wells. The hideous mess that is Darfur and Southern Sudan is stopping foreign companies (mostly Chinese) from drilling for oil there. Iraqi insurgency prevents the oil industry from recovering from the damage done by looters following the invasion. There hasn't been sufficient progress in technology for drilling of the arctic ocean and south atlantic (around the Falkland Islands) to be viable. The political issues around the Spratly islands are making some progress, but this area with a reserve larger than Kuwait is still awaiting development until the politics are solved. Unless a mass outbreak of world reasonableness occurs, we may be facing peak oil now, in defiance of how much we could actually be extracting.
 Of course, "Peak oil" refers to global peak oil production. The US has already had its peak, and currently over 50% of its oil is imported, creating problems for balance of trade and foreign policy issues. The UK and Norway hit their peaks in 2000, so they face increasing imported energy and a hole in their national budgets (especially Norway). I'll post tomorrow about looking at energy in a wider sense, but I'll leave on a few high spots I discovered while trying to find good links:

Biotech for biodiesel
http://www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=348990&story_id=113165137

Renault-Nissan's plans for electric cars
http://www.economist.com/business/displaystory.cfm?story_id=1133242
Battery technology for cars
http://www.economist.com/science/tq/displaystory.cfm?story_id=10789409

There's still some hope we can keep vehicles running in a petroleum-scarce future.

Tom


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