GAO Report on Oil Supply

[Link = GAO Report(pdf)]

This is a link to the recently released report from the United States Government Accountability Office titled "CRUDE OIL - Uncertainty about Future Oil Supply Makes It Important to Develop a Strategy for Addressing a Peak and Decline in Oil Production." I have not read through it yet and there is a lot of commentary out there to sort through so I will not add my comments at this time. After I have absorbed all of the discussion, I will post my thoughts. I will say one thing. This appears to be a real escalation of visibility for the peak oil problem in the United States. As the report states, the United States must be concerned because the United States is the most vulnerable to oil disruptions.

Energy crisis demands immediate attention

“We are not going to reach energy independence in this nation and have better control over our national security as long as we remain dependent on the internal combustion engine and air traffic to move people and goods,” Schlesinger said.

With $5 billion worth of oil being used daily and the world’s existing oil fields in a decline of about 4% a year, Schlesinger detailed three relatively immediate alternatives: conservation, renewable resources and nuclear power. However, his prediction that future demand for oil would mean finding the equivalence of nine Saudia Arabia’s had more of an impact on the crowd.

[Link: CollegiateTimes.com]

People with real credentials are beginning to talk about the energy crisis now. James R. Schlesinger is a bonafide insider and person of knowledge. If you read the message between the lines of this article, it is impossible to deny the need for speed in any solution we bring to the energy table. Sadly, we have very few energy solutions available to us and all of them involve, at least, the whole of American society and probably the entire globe. More unfortunately, there are so very few solutions at the societal level that can be implemented in less than a generation. There is no margin for error and if we fail there will be hell to pay. I wish I were more optimistic about our ability to deal rationally with a problem of this magnitude.

I recently heard someone say that we will be OK because all of history has had a record of progress and advancement of society. I wanted to say that he needed to talk to a few people in Italy during the middle of the dark ages about all of the improvements they saw in their life compared to the Roman empire. We are not on a constant upward slope. "*%$?@" happens and when it does we are not guaranteed a rain check.

The Peak Oil Crisis: The 4 Facets of Peak Oil

Looming just over the horizon are four great storms that soon will have a major impact on nearly all the world’s peoples and their descendents for decades to come. We know these storms are coming, for we can clearly see their outlines and some are already beginning to feel the winds.

We don’t know the exact timing nor the order of these storms’ arrival. We do know that the order in which they come will be important to how these storms interact with what our lifestyles will be like in the years ahead.

[Link: Falls Church News-Press]

Tom Whipple at Falls Church News-Press is always a good read. Sometimes his observations on Peak Oil and the real future are humorous and sometimes not but they are always informative. This article is pretty direct and to the point as usual.
We are facing the four horsemen of the petrocollapse. Physical, geological depletion; political chaos due to the uneven distribution of supplies and consumption; catastrophic environmental effects from uncontrolled oil use, culminating in significant global climate change; and finally economic meltdown as the costs of a critical resource become astronomical. These four "storms" are brewing as we speak and their effects are visible to those who are willing to see. They will all probably become obvious to everyone within a generation. But, as Tom observes, the details are still up in the air. The riders are visible on the ridge, we still can't tell who will get here first.

Toyota picks Mississippi for new plant

Toyota Motor Corp.'s Highlander sport utility vehicle should start rolling off the assembly line at a new, $1.3 billion plant in northeast Mississippi by 2010, company and state officials said Tuesday.
Toyota disclosed the site for its eighth vehicle assembly plant in North America, saying it will be built on a 1,700-acre site at Blue Springs, about 10 miles northwest of Tupelo. It also considered sites in neighboring states Arkansas and Tennessee.
The Mississippi plant will manufacture 150,000 Highlanders a year. It also will create 2,000 badly needed jobs in an area with an economy that has slowed because of losses in furniture

[Link: Houston Chronicle]

So Toyota expects surging SUV demand in the U.S. by 2010. I guess I would have to question that projection. There are always many ways to look at the future of course. If you are a big auto manufacture, however, they must all be through rose-colored glasses. There aren't many good post-peak oil scenarios out there for auto manufacturers.

In depth - Study sees harmful hunt for extra oil

A report from Wood Mackenzie, the Edinburgh-based consultancy, calculates that the world holds 3,600bn barrels of unconventional oil and gas that need a lot of energy to extract.

So far only 8 per cent of that has begun to be developed, because the world has relied on easier sources of oil and gas.

Only 15 per cent of the 3,600bn is heavy and extra-heavy oil, with the rest being even more challenging.

[Link: FT.com]

The concept of ERoEI (Energy Return on Energy Invested) is thrown around a lot in discussions of energy depletion and Peak Oil. Most of us think of it as a measure of the difficulty of obtaining the oil but its real importance might be its relationship to reserves. Think about it for a second. If a barrel of very difficult to extract oil has an ERoEI of 1.0 (ie it takes the energy equivalent of a barrel of oil to extract it) it really doesn't exist. There is no reason to go after it. In other words you can't really count that barrel as part of our energy reserves if we count the barrel we will use to get it out. Taking that a little further, we really should degrade all reserve estimates by the ratio of ERoEI of the oil in reserve. If oil is twice as hard to get out, it should only count as half as much oil when we add up our reserves. I am going to have to think about this some more but if I am right the world's oil reserves have just gone down a lot.

Running out of oil may not be the issue at all

Watson said other above-ground risks include higher costs of finding oil that could chill production and the lack of enough engineers and other professionals to replace the industry's aging work force.

"Above-ground peak oil will trump below-ground peak oil every time," Watson said.

[link: Chron.com - Houston Chronicle]

The shorter version of this article is "there is plenty of oil, we just won't be able to get at it so Peak Oil is a myth." I guess I am just dense but I don't remember anywhere that the phenomenon of oil depletion is only related to physical reserves or that it will occur without any difficulty. That is what peak oil is for Heaven's sake. It is like picking fruit on a tree. The first half of the harvest is no problem then you realize that those beauties up in the top or over the neighbors fence are going to be a lot more trouble than they are worth. That is when you leave them there and move on to the next tree. Unless, of course, there are no more trees. At that point if you want more fruit you are going to pay the price. At some point even that last branch may not be worth the effort and the birds are going to get the benefit. Those "above-ground" peak oil problems that he is complaining about are part and parcel of the peak oil problem.

Matt Simmons (Bloomberg): Peak Oil Now, Oil Perhaps to $300

Watch an interview of Matt Simmons on the Bloomberg Report. This is the interview where he predicts $300/barrel oil and declares peak oil is here.