Peak Oil happened in 2007, or was it 2006?
The concerns are grave, the evidence is solid that in the coming years the earth's climate could tip and snap into a scenario with a new balance point and not a friendly one. As impetus for sustainable planning climate science is so far not working. However there is a different set of scientific data that can add momentum to justify a 15 year conversion plan to implement sustainable energy technologies with a war economy like intensity. The International Energy Agency, representing OECD countries from the EU, further Canada, the US, Japan, and Australia among others, is widely recognized for credible research and has just presented its 2008 World Energy Outlook.
As in the 2007 WEO, IEAs chief economist Fatih Birol showed global oil production figures that are going down following three or four years of a plateau at 84 or 85 million barrels per day. Good news for the environment to see the biggest climate change culprit waning? Fatih Birol, the Energy Watch Group, leading oil geologists with an ecological bend like Colin Campbell think not. What they know is that oil production has shrunk onto the downward leg of an irreversible decline, Peak Oil Production is now history, EWG recorded the event for 2006. They also think that a motivation to develop green solutions especially for the transportation sector, which is currently ruled by oil at a totality of 98%, requires a recognition of the situation.
Fatih Birol put it best in a recent interview: We must leave oil before it leaves us. The oil leaving us option means a loss of initiative, loss of wiggle room to act and not just economic disruption for decades but also very dirty and conflict rich technology and energy avenues that will be chosen under distress.
Under the impact of a global recession Poland and Italy about a month ago went back on their part of the EUs green house reduction targets that were to be met by 2020. Several European automakers have just now cut the funding for programs to develop greener cars. The sway of carbon taxes and the romantic hope to nickel and dime people towards sustainability in the place of serious infrastructure and innovation plans went up in smoke. Geology and climate science are both describing nature. Why not allow the two to be discussed in context?
Small is big when it comes to global oil shortages. Following 1973, a temporary reduction of just 5 per cent of oil production caused a price increase of more than 400 per cent, and there was no demand shortfall at the onset. This disrupted a financial system that was more real than ours and spelled serious trouble for essential productivity, not unlike now. The 73 and 79 oil shocks had political reasons and were short lived but also recognized for what they were.
Peak Oil has a geological limitation, the affordable and easy to exploit oil reserves are depleting. This doesn't work in an economy where stability rests on growth. In 2008 unlike 1973 most commentators and leaders, overlooked and overlook a much bigger shortage of 15 % or 12 million barrel per day of demand shortfall.
The oil shortage paired up with the downturn of output rates that together caused a crude price run beyond twice of the functional pain threshold for the world economy of about $70. A lot of food production in Africa, the manufacture and transport of many Chinese goods were priced out of the market. South Korea saw gas shortages in 2007 and 2008, Alberta and Guangdong province in China saw diesel shortages in 2008. Many more regions of the world experienced deeper shortages and more fuel rationing than in previous years. Then we saw factories closing in China, Ontario and other places, global recession set in which finally meant oil demand destruction.
Once projects and businesses are shut down, equipment is scrapped and the workforce is dispersed it doesnt matter how low the fuel prices and petrochemical resource costs will drop. Bills are not paid, shipping costs exceed the worth of products, goods are not delivered, customers go elsewhere, credit disappears, contracts are cancelled.
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