Tuesday, February 23, 2010

The Coming Energy Shortage, Part 1: Conversations About Peak Oil

I’ve been very focussed on the inner-workings of the Green Party’s Federal Council in my blog over the last several months. Now that there has been a decision on the leadership contest issue, it’s time for me to turn my attentions elsewhere, and hopefully to matters which will be of interest to a bit of a wider audience (not that I haven’t enjoyed getting into the weedy discussions we’ve been having about internal party politics).

Yesterday, I was reading about how the price of gasoline is projected to rise to about $1.12 this summer time. That surprised me a little bit, because I’ve been telling my wife for some time now that we should be expecting gas prices to be up near $1.30 to $1.40, as the economy has started to pick up again. Apparently what I hadn’t considered in my personal calculations is the fact that North American reserves have increased a fair bit as a result of the recession, and North American processing plants are apparently running at only 80% capacity. Further, a strong Canadian dollar is also impacting price. Some experts are saying that this means that the price of gas shouldn’t really have to rise at all, but given that it’s summer and there’s profit to be made, they’re still predicting a modest rise (I think I read that in 22 of the past 24 Aprils, gas prices rose).

This is probably good news for our economy. I say "probably" because this modest rise means that we likely will put off having a serious discussion about the looming energy shortage until we start to experience a bigger hit to our wallets. Now, I’m no expert, and maybe that’s why I’m concerned about an energy shortage. It seems that the "experts" aren’t exactly ready to concede that we’re running out of cheap oil and gas, but a few heavy-weight voices have chimed in recently. Sir Richard Branson, founder of Virgin-this-that-and-the-other-thing, recently rang an alarm bell about peak oil. Since this guy owns an airline, he’s probably quite concerned about where all of this leading.

When gazing into my crystal ball at the beginning of this year, I made a prediction that the world would start becoming more familiar with the term "peak oil" in 2009, as I expected to hear more conversations around this topic. So far, that prediction seems to be coming true, however it was predicated on sky-rocketing prices at the pumps this summer, similar to those experienced back in 2008. That may still happen, but it seems that the economic circumstances might not be similar enough, given that the economy was in full boom mode back in ‘08, and we’re now just lurching out of a recession.

Even if we manage to avoid having to think too much about peak oil in 2009, certainly as the global economy begins to pick up more steam, the issue will have to move to the front burner. While I keep hearing about all of these new discoveries of huge fields which will stretch our global reserves for at least another 40 years, I also keep hearing about how global production has plateaued (although this may also be because of the recession). Who is one supposed to believe? Normally, at times like this, I’d advocate that we all take a close and independent look at the facts to get a true story, but in this case, the "facts" may not be so factual, as we’re relying on a very narrow range of data provided by multi-national corporations and oil producing nations themselves. As we know, these guys have an interest in over-stating their reserves, so that they continue to appear more financially viable over a longer term. Can we trust their reporting? Many don’t, and I’m certainly going to take their numbers with a lot of grains of salt (as much salt, maybe, as in the sea water the Saudi’s are pumping into the Ghawar field to get out the last drop of oil).

In the next few blog posts, I’d like to explore what I think the impacts of peak oil on my community, my region and my country might mean. I’ve been giving this all some thought as I walk along the sidewalks of my hometown of Sudbury, contemplating whether my City is resilient enough to inhabit a world where only the wealthy can afford to drive. Then, I think more broadly about Northern Ontario, which is both like and not like Sudbury. And finally, what about Canada? Is it right to even think about something called "Canada" in a future of high-priced energy resources?

It saddens me to think that we’re likely going to lose more time before initiating the adult conversations we need to have around the subject of peak oil. Energy prices are only going to go up, there’s no avoiding that. Why aren’t we preparing? Why do we continue to want to believe that tomorrow is going to be like today?

Well, at least there might be some room for the latest economic recovery to take hold. That’s pretty good news I suppose, even for those out there who believe that the capitalist economic system we inhabit is unsustainable in the mid- to long-term.

To Be Continued in Part 2...

1 comment:

Carter Apps, dabbler of stuff said...

Good for you,

Peak oil and its impact on our way of life, food security, regional sustainability are the things I want to hear more people talk about.