Radical Noesis - Thinking outside the box

I personally believe that we are at or past peak oil - that point where we have pumped the most available and usable oil reserves. At the peak, there is still oil, but it is more difficult to extract, of lower quality, and less efficient and more difficult to refine. As demand increases, but the amount and quality of oil extracted increases, price goes up, availability goes down, and competition increases. This leads to the expectable scenario of increasing violent competition, shortages, and global economic collapse with all of the nightmare images that brings to mind.

The argument that there is "plenty" of oil is in one sense true in the peak scenario. However, can it be extracted and used in a cost effective manner? Will the increasing costs of extraction and refining drive the costs so high that it is likely to cause an economic collapse? I think this is likely. You know that things are getting desperate when the best plan is to build nuclear power plants to extract the oil from Canada's tar sands. Yes, it is true. Jerome Parrish writing at the Daily Kos had a nice piece on this - Big oil getting desperate: Making oil with nuclear energy. Reading the comments is also informative. In taking this path, the cost of oil has risen to such a point that using an expensive and exhaustible resource (fissionable material) is a cost effective way to extract it. Never mind that both tar sand mining and nuclear power are environmentally destructive.

Another aspect of the "debate" is that energy companies are manufacturing the crisis. This possibility came glaringly to light with two hurricanes closing down most of the refining capacity of the Gulf Coast of the United States. Oil companies have been closing refineries for decades in what is clearly a conspiracy to drive up the cost of fuel in the United States. Now it is said that we need more refining capacity and that the U.S. taxpayer should help foot the bill. Globally there is also a refining capacity problem. While this is true, does it mean that we are not in a peak oil situation? No it does not, though the refining issue (and the conspiracy to drive up profits) are both real.

I think the evidence is clear that US energy companies have indeed done what they are accused of doing. This may even be true on a global level, though I have not seen reports to that effect. What is real is that many refineries are not capable of efficiently refining heavy crude to meet the demand for fuel supplies. You can pump all the heavy crude you want, but if it cannot be efficiently refined to a marketable product, then there are major problems. Heavy crude is not in demand - light crude is. When you look at the DoE oil price charts, you should note that the costs given are for light crude. Light crude is in high demand; is being extracted primarily from Africa and the North Sea; and is what global refineries can handle. Building new refineries to process crude into marketable product would ease the situation to some extent. However it doesn't address the following issues:
1) Heavy crude is what is predominantly being pumped globally which is a clear indication that oil is past its peak.
2) You do not just throw up a refinery - they take years to build. In the intervening time, the costs will continue to rise dramatically.
3) Oil demand is increasing every year even though production is not. Right now there is only about a 2% gap between supply and demand. Oil demand is expected to increase by over 2% a year. There are no major new finds, and no way to significantly increase supply. While oil nations and countries may be able to increase production slightly in the short term,it only shortens the time line of when production will fall substantially below demand.

The effect of all of this on real people and national economies is dire. Even if this is all a "conspiracy" by big oil, the economic and social impacts will be virtually the same as if peak oil had come and gone. The difference I guess is that nations could expropriate what big oil has allegedly created through refinery collusion. However, addressing the refinery shortage (assuming it is real) is a long term project. In the mean time, the global oil economy comes to a screeching halt.

I was asked in an interview once whether peak oil was really a problem since we still had half the earth's oil still in the earth. My answer was that for the overwhelming majority of us it was not whether the oil was there or not, but how much it cost. If costs go beyond people's ability to pay, then you don't have access to the oil ... the products from it ... or anything transported using oil to deliver it. For the majority of the global population, oil will have peaked and crashed. With that reality, our lives have also crashed.

The desperation and chaos caused by this (regardless of source or attribution) will place populations in a risky situation. Resource (or Oil) wars will be supported to relieve the destruction. People will accept the loss of their rights, and the implementation of massive military and government control. Internal populations that are competing for oil will come under attack (be those immigrants, minority populations, or those who are poor). People will die, hegemonic powers will rise and exert their will.

Is all of this doom and gloom inevitable? I believe that a certain amount of it is unavoidable, but that action by people (you mean and others) can shift the scenario. That is why I continue to talk about these issues. That slim possibility to shift what is rushing at us means the difference between life and death for millions of people on the planet, and for all the life that shares the planet with us.