Investment bank predicts 'super spike' in oil prices

Investment bank Goldman Sachs released a report that predicts the next several years will be a period of exceptionally high oil prices with a possible spike to $105 a barrel. The report said that high prices are what is needed to encourage conservation and the development of new supply and that this will take several years.

The investment bank is not making the argument for a peak in world oil production as this quote from the report shows:

We believe oil markets may have entered the early stages of what we have referred to as a "super spike" period -- a multi-year trading band of oil prices high enough to meaningfully reduce energy consumption and recreate a spare capacity cushion only after which will lower energy prices return.

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They do what to the trees?

They spray the trees with nasty herbicides and pesticides just like crops. That's what people in Oregon are finding out to their dismay. Timber is a crop, just like any other. In order to make trees grow taller and prevent insects from harming them timber companies spray from planes as well as from the ground. Do the size of the so-called buffer zones they are supposed to observe around streams seem adequate to you? Does it seem sensible that they can spray right up to your property line no matter how close it is to your house or yard?

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Why natural gas may not be the "fuel of the future"

This is a piece from last year, but it does a good job of explaining why natural gas may not be able to provide the so-called bridge between oil and a renewable energy economy. There's not enough of it. For more details, click through.

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Learned scientists: We're screwed

I have spent a good deal of space on this blog worrying about peak oil and alternative energy issues. Let's say for the sake of argument that the world makes a successful transition to a new energy economy without a lot of trouble. What's next? Unfortunately, what's next is that we continue to destroy the soil, the water, the land, the sea, and the climate that all creatures including us humans depend on. We inevitably bump up against other limits of resource use beyond energy.

That's the verdict of 1,300 scientist from 95 countries examining the global ecosphere for a report due out today. Here's what the lead author had to say:

"The bottom line of this assessment is that we are spending earth's natural capital, putting such strain on the natural functions of earth that the ability of the planet's ecosystems to sustain future generations can no longer be taken for granted."

Can we reverse course and change the fate of our children and grandchildren? Yes, say the authors, but nobody is seriously thinking about implementing the major changes we need in order to make the planet a better instead of worse place for future generations.

To give you an example of the kind of largely hidden dependency we have on natural systems, take a look at this article on Wikipedia on the destruction of pollinators, that is, insects and animals that pollinate over 90 foods crops for us. Our food supply would be in big trouble without them.

(Via Flying Talking Donkey and Cryptogon.)

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States sue EPA over mercury regulations

It was inevitable that several states would sue the Environmental Protection Agency over recently released rules that allow power plants to trade mercury emission credits. Here's why:

"EPA's emissions trading plan will allow some power plants to actually increase mercury emissions, creating hot spots of mercury deposition and threatening communities," said Attorney General Peter Harvey of New Jersey, lead plaintiff in the case....

The program starts in 2010. Until then, utilities do not have to do anything specifically to control mercury....

The lawsuit challenges the deadline given to power plants for compliance, and assails the EPA for exempting power plants from having to install the strictest emissions control technology available. That technology would cut mercury pollution by 90 percent, according to the New Jersey attorney general's office.

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Forecasting the peak

With so many forecasts now put forward concerning the peak in world oil production, how does one sort through them and makes sense of them? It turns out that somebody has attempted the task. A summary is available here. While the result gives us no precision, it should give us no comfort. If the peak is close by, we are simply not prepared for it. Even if it is 20 or 30 years hence, we will need to focus every bit of our ingenuity, political courage, and common purpose to make a successful transition as this report from the U. S. Department of Energy suggests.

(It's worth noting that the oil optimists almost always make the argument that the peak is far away, and therefore, we have plenty of time to prepare for it. They never, in my experience, claim that if the peak is soon, the marketplace will solve everything. This is a tacit admission that the lassiez-faire marketplace solution will turn out to be disastrous under a scenario that includes an imminent peak.)

The authors of the report entitled "Forecasting the availability and diversity of global conventional oil supply" believe that despite the uncertainty inherent in the predictions which range from 2004 to 2053, given the scale and seriousness of the problem, we shouldn't wait to prepare:

The market can be powerful thing, but they [price increases] must be efficient enough to spur development of these alternatives and end-use technologies in time to offset falling conventional production. Given that the oil prices needed to spur this development at the necessary scale [aren't] likely until the time of peak, assuming that markets can ensure timely transitions seems unwise....

The prudence of the precautionary principle seems self-evident here - especially so because most of the oil necessary for the peak to occur in 2037 has not yet been discovered....

For an explanation of why market prices may not signal an impending peak until shortly before it occurs, see my previous post, Faith-based economics II: The case of oil's sudden scarcity.

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Out of thin air?

An automobile that runs on air is being touted as "clean." At first when you read the Los Angeles Times article you get the impression that this car is some kind of perpetual motion machine. Then, the power source is revealed: compressed air shoved into high-pressure storage tanks using, what else, an electricity-driven compressor. The air-propelled car may have some advantages. But, using renewable fuel is not one of them. Unless the electricity used comes from a renewable source, owners of such cars will simply be generating pollution and global warming gases from the smokestacks of their local power plants instead from the tailpipes of their cars. The moral of the story? Always trace back "clean" energy devices to their energy source and ask, "Is the actual source of the energy clean and renewable?"

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Geo green fantasies

Peak Energy has a nice dissection of the so-called "Geo Green" agenda. It's a fantasy of energy independence based on nuclear power and ethanol (an energy loser which would cost us more in oil and natural gas energy than the energy we would get out of it). The danger is that this silly agenda which is completely unworkable will crowd out a genuinely workable plan for an energy transition that would include a combination of massive conservation, development of renewable energy sources, and a thorough rearrangement of the way we live consistent with a lower energy economy.

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Palast on why Iraq's oil fields weren't privatized

BBC reporter Greg Palast is reporting that the curious reversal of Bush administration policy regarding the privatization of the Iraqi national oil company was the result of pressure from international oil companies that are enjoying high oil prices. In my previous post, Global resource wars: The Rosetta Stone, I suggested that the administration's neoconservatives wanted to privatize Iraqi oil as a way of increasing world oil production and bringing down prices. Palast confirms that this was the original plan until Big Oil stepped in and said "no."

His reporting explains why a central aim of the neoconservative agenda has been abandoned. The story also points up the venality of the Bush administration. Far from being focused on achieving its objectives, the administration shows once again that it simply shifts course depending on the whims of its biggest contributors regardless of the consequences. Naturally, the neocons are now asking what the point of the war was if the main objective, increasing oil supplies and breaking OPEC, has been abandoned.

Of course, much of the American public still believes the fables the administration told them about Iraq's involvement with 911, terrorism and weapons of mass destruction, even though all of these have been thoroughly debunked. What would they think if they understood that the real reason for the invasion was to lower oil prices through privatization and increased production? And, what would they think if they also knew that the real and main aim of the war has now been abandoned because one of the Republican party's biggest contributors, international oil companies, told the administration to abandon it?

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A disaster in waiting

The GMO Menace provides an excellent overview of the problems with GMO plants and animals. The authors discuss the instability of genetic alterations, the known and possible toxic results, antibiotic resistance, the awakening of dormant viruses (for which we may have little protection), genetic pollution of non-GMO crops, superweeds, destruction of biodiversity, the possible extinction of wild species overcome by GMO species, and increased pesticide consumption (contrary to biotech seed makers' promises). If some of these problems are unfamiliar to you, click through.

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