Rising prices rekindle peak oil debate

A noted environmental economist at Simon Fraser University believes the issue of peaking oil production will become irrelevant if humanity takes steps to address climate change.

Mark Jaccard made the comment on January 4 as oil prices hovered at about US$90 per barrel—up from around US$75 per barrel approximately six months ago.

“We have to address the climate issue, in my opinion,” Jaccard told the Georgia Straight in a phone interview. “We’ve got to go after that, and that conveniently takes care of your peak-oil concern.”

Jaccard’s view on the threat posed by peak oil sharply contradicts that of Richard Heinberg, a senior fellow-in-residence at the California-based Post Carbon Institute who has written extensively on the subject. Heinberg noted in his 2006 book The Oil Depletion Protocol: A Plan to Avert Oil Wars, Terrorism and Economic Collapse that the use of fossil fuels is so widespread in everyday life that conflict and societal collapse may result if the transition away from these finite resources is not properly managed.

From his home in Santa Rosa, Heinberg reaffirmed the common belief that the cheapest sources of oil have already been tapped. He told the Straight that the oil industry, if it is to fund new extraction projects, requires the global price to be at about US$70 per barrel. The price that will send the economy back into recession, because of overall increases in the cost of goods and services, is likely to be between US$90 and US$100 per barrel, he said.

“So there is a very, very small range where we can still have a functioning economy, but not really a growing economy,” he explained. Heinberg said he was reluctant to make an economic prediction for the short term, but he was adamant that “one way or the other, by the end of 2011, the economy will be in worse shape than now.”

Jaccard, however, said he believes economic growth is still possible in a world of depleting oil supplies.

“I do think that growth, in terms of human material and energy throughput, has to stop, and very soon,” he stated. “But I still think economies will still grow. It just depends on how you define economic growth.”

Jaccard has frequently disagreed with pronouncements by peak-oil theorists who say that global oil production will peak relatively soon—or that it has already peaked—and will go into inevitable decline. They claim this will push up the price of crude oil unless demand is curtailed or alternatives are found to the fossil-fuel dependence that has propelled economies worldwide since the Industrial Revolution.

Heinberg said he is working on a book with the working title The End of Growth. Jaccard acknowledged that he agrees with Heinberg’s analysis “that we are on a completely unsustainable path”.

“I just don’t see the cataclysm being in energy markets; I see the cataclysm coming much sooner in the climate,” Jaccard said. “And guess what? If we are serious and address climate change, the price of oil plummets.”

Jaccard said this is because, ideally, policymakers would have already placed a price on the atmosphere, resulting in decreased use of oil or a transition to energy sources such as hydrogen or electricity that is derived mostly from renewables.

But Heinberg noted that since The Oil Depletion Protocol was published in 2006, he has seen “almost no indication of interest on the part of policymakers” in introducing a protocol to deal with oil depletion.

“Human nature has this inbuilt discounting calculus,” Heinberg said. “We value immediate rewards over rewards that we’ll get a few years down the line. The same thing with threats: we are more willing to do more to avert an immediate threat than in a few years. So if you are trying to talk people into accepting a reduction in GDP now in order to avert climate change, for example, it is a really tough sell.”

Comments (39) Add New Comment
Copernican
Hydrogen is not a source of energy. Gas pumps are not a source of energy and wires are not a source of energy. They are all only carriers. It takes a huge amount of energy to isolate hydrogen and to put it into a usable form. My take is that Mr Jaccard has no understanding of peak oil or energy for that matter. Our world is screwed seven ways. It is time to punt the economists out of posistions of power and let the engineers try to fix the mess.
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How's that Carbon Tax Working?
Say there, Doctor Jaccard, how's BC's Carbon Tax working to reduce GHGs and climate change? I thought you said it was guaranteed to show results quickly.

And tell me, how's the PAB on getting cheques out, quick or slow?
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seth
The Canadian environmental lobby Jarrard/Suzuki/Pembina/Sierra Club/Greenpeace are deadly defacto global deniers, promoting the annual deaths of thousands and illness of hundreds of thousands of Canadian more from air and groundwater pollution. Billions will die if they get their way and drag us over the global warming precipice.

That fools like these get so much play in publications like the Straight is part of the reason we are heading for a deadly civilization ending global warming/peak oil crisis.

Read the latest spew from Jaccard/Suzuki/Pembina here.

http://pubs.pembina.org/reports/climate-leadership-report-en.pdf

Jaccard's solution "clean" coal, natural gas, and wind backed up by natural gas.

Clean coal reduces deadly particulate emissions somewhat, shoves most of the CO2 underground for a while while leaving the enormous cubic miles of annual deadly arsenic and mercury ash in piles polluting groundwater. Even it worked it would only cut those thousands of deaths in half.

http://www.cbc.ca/technology/story/2009/09/23/carbon-capture-study.html

Wind has to be load balanced 100% of name plate capacity with massive transmission builds and low efficiency fast spooling natural gas plant. The wind /gas/transmission combo actually produces more green house gases at a much higher cost than skipping the wind and building high efficiency CCGT plant or nuclear instead.

Because of the 75 times as potent as CO2 methane gas leaks all over the pipeline system, that NG is actually almost as bad a GHG producer as coal. Natural gas is not clean burning, spewing deadly particulate,GHG, NOX and radioactive radon gas.

One thing these fools are unanimous about is their hatred of nuclear power, and post nonsense about it every chance they get.

Au contraire said James Cameron recently

" I’m pro-nuclear, yeah, in this particular context, as a bridge to a fully sustainable future. I think the waste problem is a 500 year horizon, I think the warming problem is a 10 to 15 year horizon. "

The Jaccard team of fools doesn't believe the science that gives us only 10 to 15 years for a maybe global warming precipice. They propose enormously expensive ineffective GHG reduction tech that would have little or no effect 50 years down the road, and dis the only tech we have that can meet the challenge in an economical and timely fashion..

They are global warming deniers!!

Some Australian power engineers, real engineers as opposed to economist Jaccard looked at a proposal to power Australia by 2020 with balanced wind solar and biomass. It was found to be impossibly expensive, utterly impractical, and an orders of magnitude more costly than nuclear with costs reaching as high as $1.20 a kwh.

http://bravenewclimate.com/2010/08/12/zca2020-critique/

Brimstone Harpo and Ontario's Dolt have already given the go ahead to replace coal with natural gas, so all that is needed is a change from gas to nuclear. Even at todays low gas prices nuclear is cheaper than gas per kwh and unlike gas is dropping rapidly. Less than two cents a kwh will be the nuclear norm within 5 years as the production for the hundreds of nukes on order worldwide moves into factory production.

Canada needs 150 new AECL ACR-1000 nukes to end fossil fuel use in Canada with 8 nukes required just to green up the Tar Sands and 15 to replace coal.

This national nuke conversion would overnight end unemployment end the global warming/peak oil menace, save the lives of thousands of Canadians every year from coal/gas air pollution and create the greatest construction boom in history.

The Fiberals believe in nuclear power and a clean energy future for Canada.

Brimstone's fascists have sold out their country for Big Oil lolly. Canada's energy and industrial future depends on giving them the boot.
seth
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glen p robbins
Let's be reasonable. Every academic I speak with - regarding academics taking positions on public policy matters - will tell you that they find it personally unethical to be on the news "all of the time".

This is Campbell's guy - Campbell is over/done - is there not another academic with expertise in this field that the news media can find to speak on this subject?

Let's move to a more professional political industry - shall we?
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Denise
In the short term we could minimize our destruction with reductions in all of our usages of oil et al. Start by pricing oil, gas etc. with TOTAL costs in, maybe if gas for cars and homes was $5.00 a litre we would use less, and stop driving so much and use smaller abodes, good luck to us all! Happy New Year, time for new positive changes!
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glen p robbins
Seth - for what its worth -- I'm going to start reading about nuclear power -- and will follow what you are writing - I am behind in my knowledge of this issue - while you are passionate about it.
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G. Smiley
Jaccard (along with a motley crew of IPCC Chicken Littles) are rent-seeking; they’ve spent the last 10 years building a man-made, global warming merry-go-round and they can’t get off. Thus, in a bid to stay relevant, Jaccard now desperately wants to conflate the failed AGW (theory) with Peak Oil (reality).
Thankfully for us, the Straight balances Jaccard’s nonsense –just barely mind you– with Heinberg. Which is more than I can say for the CBC, where in a recent radio program, the moderator had to ”˜accidently’ cut off my mike as my questions/responses were becoming too much of an embarrassment for Mr. Wizard.
Simply stated”¦ Peak Oil is a liquid transportation fuel crisis that has EVERYTHING to do with petroleum input reduction and NOTHING to do with GHGs.
Burying the scary CO2 monster in the sandbox; putting solar panels on your garage; trading carbon with the banksters *wink wink* and the litany of useless AGW policies that Jaccard, Monbiot, Suzuki and Co. would have us implement, will do absolutely nothing to offset the rapidly increasing consumption of oil.
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Drew
Check out this address today, Jan. 6, for a cartoon showing Jacard in action.

http://thechronicleherald.ca/toon.php
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Kim
Five resources from different perspectives looking at peak oil:

1) International Energy Agency's 2010 'World Energy Outlook' (http://www.worldenergyoutlook.org/docs/weo2010/WEO2010_es_english.pdf) admits that global conventional oil production peaked in 2006. "Conventional oil" is the cheap and easy stuff where a well is drilled, pipe is inserted and oil comes up out of the ground that can be shipped directly to a refinery. "Unconventional oil" refers to things like tar sands, ultra-deep-water oil, coal-to-liquids, oil shale, and natural gas liquids that is much more difficult and expensive to produce. Here's the quote admitting the 2006 peak of conventional oil:
"Crude oil output reaches an undulating plateau of around 68-69 mb/d by 2020, but never regains its all-time peak of 70 mb/d reached in 2006, while production of natural gas liquids (NGL) and unconventional oil grows quickly." (p. 6)

2) Deutsch Bank's new 'The End of the Oil Age' report (http://www.consensus-inc.com/002001i/knay1537/fin-com/1223fm-05.pdf) tackles our predicament from a financial perspective. A few interesting points:
- "The fact that 2010 demand growth (+2.2mb/d) will likely be the second fastest for 30 years raises a red flag, especially as we work through OPEC spare capacity - prices will be spiking by 2012 if demand continues to grow at this rate." (p.1)
- "... we arrive at a price around $125 per barrel as the next peak point, sometime before 2015, depending on demand strength in the interim." (p.52)
- Referring to the 2008 price spike it explains that "the last shock set in motion major behavioral and policy changes that will facilitate rapid behavioral changes when the next one comes." (p.51)

3) Dr. James Schlesinger, Former US Secretary of Defense, Secretary of Energy and CIA Director explains that "The Peak Oil Debate is Over": http://vimeo.com/16259773

4) A great video featuring Richard Heinberg, James Howard Kunstler, Nicole Foss, Noam Chomsky, Bill McKibben and more: http://www.youtube.com/watch?v=UUmwy0VTnqM.
They run the gamut of net energy, depletion rates, climate denial, why politicians and media don't speak truthfully about peak oil and climate change, public mistrust, the importance of US leadership, etc.

5) "”˜In Transition’ (http://vimeo.com/8029815) is the first detailed film about the Transition movement filmed by those that know it best, those who are making it happen on the ground. The Transition movement is about communities around the world responding to peak oil and climate change with creativity, imagination and humour, and setting about rebuilding their local economies and communities. It is positive, solutions focused, viral and fun."
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glen p robbins
Thanks Kim- Seth - Its clear that there are 2 sides, very far apart. The argument that the "deniers" - as far as oil is concerned- premise this on the fact - that the same folks (institutional) who denied problems in banking and finance - are the same folks - with politicians in tow--who are saying we have no problems on energy matters - there is plenty of oil etc.

The economics of oil are US centric and that country reached "Peak Oil" in the late 70's being forced to import much of its oil from foreign sources creating geo-political issues - threat of war etc. The 'other side' says there is plenty of oil - but opponents say its either shale oil - more expensive and hard on the environment to obtain - to produce 'net energy'.

Oil is being found - but the oil is much - much deeper in the water, Brazil offshore 3 times the distance of Mexico - and pushing the limits of technology - the recent Gulf of Mexico, world's largest oil disaster the evidence of the difficulties that follow this reality.

Coal is dirty and clean coal I am not certain about - more research to come.

Chomsky says something interesting - which I understand well - the fact that politicians everywhere are not trusted well -- means that political will from government - which most supporters of climate change believe is necessary to move to solutions--because it is untrustworthy - in large measure from the large business and bank bail-outs of the last few years -actually plays into the hand of the "deniers" - as the population is reluctant to leave the solutions -- in government hands - whether or not they believe in the market or not - and often from my research - opinion is no better than that of politicians and government. Further, as greater segments of the population concern themselves with food and heat - the less concerned they become about the future of the planet--so the will to solve future energy problems - diminishes further.

Those who assert global warming are indicating that the increasing demands for more energy will eventually bust the energy grid with one area or another being forced to go without.

So---the overall 911 to this is that global warming is causing water to rise particularly in populated areas and other problems that predicate natural disasters- deaths and destruction. More than this - depleting energy resources with increasing demand for energy could create economic calamity on a western civilization 'dependent on economic growth'.

So generally increasing pollution - global warming - depleting resources - or resources more difficult to obtain - increasing liklihood of economic castrophe - over consumption - forcing economic setbacks are the elements of the problem.

I'm not sure what the proposals are for the solution.

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Kim
@ glen p. robbins:

Regarding your wondering about proposals for "the solution" I would say that there is not one solution but rather the need for many solutions. From what I've read peak oil is more of a liquid fuels problem than anything else so anything that involves transport is going to be affected and will cost more. It's why former CIBC economist Jeff Rubin argues peak oil will eventually severely curb globalization as transport costs exceed the labour savings of offshore production (http://www.aspousa.org/index.php/2010/11/jeff-rubin-oil-and-the-end-of-g...). It's also why energy analyst Charles Maxwell thinks we'll be eating root vegetables in winter instead of strawberries shipped from Portugal by the end of the decade (http://www.indexuniverse.com/sections/interviews/8360-eedens-maxwell-bra...). Both have obvious benefits in terms of reducing transport based emissions. It's also why efforts to build walkable and bikable development and infrastructure in our region are going to look pretty good in a few years. If only we were getting a regional electrified streetcar system Patrick Condon proposes (http://thetyee.ca/News/2010/09/16/StreetcarToBeDesired/) instead of the Gateway project and limited Skytrain lines”¦

Matt Simmons, a Republican oil guy (http://thetyee.ca/Opinion/2010/08/30/MattSimmons/) who has a history of speaking out about peak oil laid out a plan (http://www.oceanenergy.org/matthew_simmons_papers/2010/Houston%20Club.pdf) before he passed away last year that he said should be adopted globally to conserve oil and reduce exposure to volatile prices:

– Base salaries on productivity
– Introduce flexible work schedules
– Work closer to where you live
– Grow foods locally
– Transport people and things first by water, then light rail, then double-track train, with heavy-duty trucks being a last choice
– End globalization by manufacturing things close to consumption point

Robert Hirsch, who co-wrote the landmark report on peak oil for the US Dept of Energy in 2005 recommends similar strategies: http://www.businessinsider.com/the-impending-world-energy-mess-2010-11#-1

There is also the Transition Towns movement (http://transitionnetwork.org/) that I linked to above which is focused on developing community/ neighbourhood based solutions (http://straight.com/article-357270/vancouver/peak-oil-spurring-locals-se...). There are groups in Vancouver and around the world now facing up to these challenges and not waiting for governments to admit to our predicament.

I am sure I am scratching the surface about the solutions and they tend to be locally focused rather than provincial (election issue?) or national but I figure this is a good start. I am also simply someone who has done a lot of reading on the topic so people should definitely do their own research to make up their own minds. Hopefully someone else will pipe in on those fronts. Interesting times.
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Avid Cyclist
If we all took transit and rode bicycles, we wouldn't be approaching peak oil.

Get on a bike. Now.
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Steve Y
Seth

The problem with nuclear is that we are at peak uranium as well. The only reason we have enough nuclear fuel right now is because we are using up old nuclear warheads to fuel our reactors. This supply is going to run out by 2013. Good time to buy some uranium mining stocks like cameco.
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Miranda Nelson
Avid Cyclist,

You are aware that you need oil to make bicycles, right? Unless there is a magical bicycle tree that I don't know about....
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@Miranda
So, are you saying that bicycles use as much oil as private automobiles -- or are you just being a moron?
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Miranda Nelson
I'm not saying that at all. I'm merely pointing out that your precious bicycles require a certain amount of inputs in their manufacturing—including significant amounts of oil. You need to extract ores from the earth (which requires oil to fuel extraction machines), transport the raw materials to a plant for processing (which requires oil-fueled vehicles), make the bicycle's component parts (rubber = oil, plastic = oil), ship the bicycles to sellers, etc.

Riding bicycles, yes. I'm all for that. Cars = pollution. That is obvious. If we could create a large-scale shift and get more people using modes of transportation that are inherently non-polluting, or at least less polluting than private vehicles, that would be great. But as Kim pointed out earlier, there is not one solution to this issue. It needs to be a conscious large-scale change. Bicycles are not a magic bullet for fixing such a gigantic problem and bicycles do not exist in an oil-less vacuum.

Please disagree with what I have to say, by all means, but I'd prefer it if you'd attack the argument and not me personally. Asking me if I'm being a moron really doesn't add anything to the discussion or the validity of what you have to say.
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seth
@Glen

For sure you can join me as one the few BC's who have a clue about nuclear power. Believe it or not Shrek is now pro nuclear.

It's amazing how much higher the support is for the technology when people actually know something about it. While our fascist MSM lead by Vaughn Palmer dis's BC nuclear being bought and paid for by the Howe Street IPP lobby, it would be interesting to see if support amongst the always uneducated BC voter is near the 65% found nationwide. There was a survey that found 65% support in BC for uranium mining.

Steve Y is an example of the ignorance and yet is so sure of hisself he is motivated to write about it. Only a small portion of world nuke fuel comes from weapons, we have already an unlimited supply with reprocessing as Britain, France , Russia, China., India and Japan are doing without any more mining and a recent MIT report has uranium supplies lasting well over a century.

While NG has to be replaced immediately with nuke power in heating and power applications it has application as a transportation fuel in the transition to nuclear power and nuclear based synfuels.

Converting a vehicle to CNG costs much less than the $2500 rebate available from Terasen. The cost of running a car on CNG is about 30 cents a liter if you could fill up at home or at a filling station in an enlightened state like UTAH. Unfortunately T Boone Pickens has bought out the most corrupt Canwest/Gordo and other scum Canadian politicians and has the franchise selling CNG for almost the same price as gasoline.

CNG and Natural gas based gas methanol blend M85 and other synfuels like DME (propane) would end domestic petroleum use within a year or two paving the way for nuclear synfuels. Natural gas based synthetic diesel is already cheaper than the petrol product.

No more peak oil!!!
seth
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@Miranda
It would be easier to attack the argument if you had one. But the context here is peak oil, and you appear to be implying that using bicycles will lead to peak oil as surely as using cars. But the amounts of oil used to manufacture, distribute, and, presumably, lube the chains of a bicycle are minuscule compared to the amounts of oil used to manufacture, distribute, and fuel a car.
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Miranda Nelson
That's certainly not what I'm implying and I apologize for giving that impression with my statement. Of course bicycles don't consume as many resources as cars do ... but they still do consume *some* resources, including oil. It would certainly be a boon to the environment (and our health) if everyone made the switch from cars to bicycles; I feel like that's an inarguable concept. However, the manufacturing of bicycles will always involve oil so it seems inaccurate to point to bicycles as being *the* solution to the problem of peak oil.

Now ... if we had walkable cities, then we wouldn't be consuming anything except the food needed to fuel ourselves. It's urban planning and sprawl which has lead to our perceived dependence on private, gas-fuelled transportation.
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Real Estate Prices
It's urban planning and sprawl which has lead to our perceived dependence on private, gas-fuelled transportation.


Miranda, the spread of population to the outer suburbs is a result of exhorbidant real estate prices in the inner regions of Metro, not by supposedly low transportation prices. The price of fuel could rise significantly without making any dent at all in population trends by municipality.

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