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Rising Fuel Prices

last-drop-of-oil.jpgFor those of us who’ve studied Peak Oil the rapidly rising energy prices we’re seeing now come as no surprise. In 2005 at the time of the fuel protests I had a letter about Peak Oil printed in the News and Journal which is reproduced below. We also held a Coffee House Discussion on Peak Oil in September 2005 and I wrote a introduction leaflet on Peak Oil and the implications

I’m not trying to say – "see I told you so" – but I’m just wanting to flag up that there’s folks around Stroud who have a deeper understanding of the emerging energy crisis and are willing to share that knowledge. So if you’d like an introductory talk on Peak Oil or an in depth discussion please get in touch – energy@transitionstroud.org – here’s the letter from the SNAJ

MOTORISTS ARE PUMPING THE OIL WELLS DRY

Stroud News and Journal, 5th October 2005 

Whilst recent price increases come as a bit of shock it wont be long before just £1 a litre seems cheap for petrol. This has nothing to do with Gordon Brown’s tax policy. We are facing a long term and increasing serious shortage of oil.

In many parts of the world oil output is already falling. This is due, simply, to the way oil fields work. When around half the recoverable oil has been extracted pressure drops and it’s necessary to work much harder to squeeze out the remainder. Oil flows more and more slowly until it’s no longer worth the effort. You can think of it as a bit like wringing out a wet towel.  Once the production peak has been passed for most of the fields in a region, then regional production goes into decline. This happened to our own North Sea oil in 1999 and output is deceasing by over 5% a year.

Many oil industry experts think that world wide oil supply will peak within the next few years. Only the OPEC countries of the middle east, allegedly, hold oil stocks sufficient to boost production beyond current world demand of 85 million barrels per day. Gordon Brown called last week for Saudi Arabia to increase supply to ease pressure on the oil price. If this increase does not materialise it’s vital that OPEC producers allow independent audits of stocks and future production potential. Without this we’re all flying blind and ever more dependent on this unstable region.

At the same time as oil supply approaches its peak we are already at the point when demand is outstripping supply. The fast growing economies of China and India are accelerating the rate of growth in demand for oil. There is currently absolutely no slack in the system. It only takes one unexpected event, like hurricane Katrina, to disrupt a small percentage of supply and oil prices jump. As a result the International Energy Agency is currently releasing 2 million barrels of oil a day from stockpiles to try to make good the shortfall and control prices. This drastic step has only been necessary once before, during the first Gulf War in 1991.

In short we’re facing an energy supply crisis. Just to compensate for deceasing rates of production the global oil industry has to add 6 million barrels a day of new supply every year. Add to that increased demand and the annual deficit is more like 10 million barrels a day. A deficit that is set to keep on growing and driving prices ever higher.

So dear car driver of the Stroud Valleys we are at the end of an era, the era of cheap oil.

 

Dave Cockcroft