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Wednesday, March 24, 2010

Politicians, the market and peak oil reality

The meeting of Britain’s energy minister to review the implications of future oil scarcity is a cause for mild optimism, according to longtime peak oil writer Tom Whipple.

The former CIA analyst suggests – writing in his regular Falls Church News-Press column, printed today – wonders if this “admission by a British government, that there might be something to this peak oil business after all” makes them the first political leaders wiling “to face reality.”

The March 22 meeting followed publication of a provocative report in February by a group of leading industrialists, calling themselves the UK Industry Taskforce on Peak Oil and Energy Security. Their The Oil Crunch: a Wake-up Call for the UK Economy, states that “oil price shocks [that] have the potential to destabilise economic, political and social activity” will happen within five years. (See previous posts; this and related energy reports are linked from the Free resources page.)

Whipple knows it’s too good to be true:

For a major political leader to publicly acknowledge that world oil production
is soon going into an unstoppable decline is a very dangerous undertaking for
the implications are unpalatable to most. If a politician were to take the next
step and start talking about remedies for falling oil supplies - conservation,
fuel-efficient cars, mass transit, perhaps even rationing - it would be almost
certain political suicide. Given our recent experience with global warming, in
which a majority of the of the U.S. population now doubts that it is being
caused by excessive burning of fossil fuels, one can only imagine the reaction
if someone proposed taking serious and expensive steps to deal with peak
oil.
He’s smart enough to know there is a general election coming up in Britain, and the government isn’t taking any chances about being accused of not listening to business leaders (the issue here, to my mind, is that the report came from business). He also states that there is zero chance of US congress taking action on the issue.
oil crunch

There are major downsides that would come with official recognition that
imminent peak oil is real and that the country must prepare. First is simply
being believed. The debate over whether the decline in global oil production is
4 or 40 years away has been going on for over a decade - and the battle lines
are already drawn. As we have seen in the debate over climate change, there are
well financed special interests waiting to tell people what they want to hear -
which is that peak oil will come in somebody else's lifetime.
And on the subject of the bought and sold, I also came across a comment piece in today’s National Post – a Canadian national newspaper (within the industry, it’s referred to as the third biggest paper in Toronto).

Under the headline The Church of peak oil, writer Peter Foster does his very best to belittle Richard Heinberg’s Monday night presentation in Toronto. Foster’s big fear is that government might have to do something that could startle investors. Once again, it’s the free market to the rescue:
PO Theorists fail -- or more precisely refuse -- to grasp that the best method
of dealing with any form of commercial scarcity is market-based ingenuity,
not some weird combination of Big Brother and Hippie co-ops.
Being the self-serving rascal that he is, Foster does his best to make Heinberg seem rambling and disjointed (or maybe he was. . . I happen to think his book Powerdown would have worked better as a Saturday morning cartoon) and anyone that wants to see action on peak oil just wants to break up society. He suggests Heinberg wants to bring in small scale, local-level agriculture and industry, rather than admit that local will be the new reality in an era without abundant cheap oil. He uses this as an example to show how out of touch peak oil people are, how they are too stupid to know about economies of scale, rather than admitting it is a likely solution to a world without cheap energy.

But never fear, because we’ve got the free market to the rescue. . . Like all who mindlessly trot out this one, Foster never stops patronizing for long enough to wonder how healthy the market will be if, when oil prices go sky high, we hit another Great Depression. No. His job is to fly the flag for big business. It’s out patriotic duty to consume; after all, the market is our saviour.

He’s the kind of journalist that despises people that ask questions – which would have been in his job description, had he not been contributing to the financial pages of a publication with such a clear political agenda. And as for the peak oil believers:

They do not see how things can go on because they have no idea how things got to
where they are. All they see is that resources are finite, and that we are using
them at an accelerating rate, so how can we not run out?
Well, yes, how can we not run out?

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