The Minister of Energy Mr. Brownlee has called for cuts in petrol and diesel prices, on Monday Dec. 29 (The NZ Herald) and again Monday Jan. 5 (The Press),
It has been the norm that government officials come out to call for cuts in the prices of petrol and diesel and sometimes they go further to call for an inquiry to investigate petrol pricing in New Zealand. On the face of it, it seems a good policy that government acts as a watchdog to protect NZ customers from over-pricing. My question is that why does the Government, who is entrusted by the nation and have the legal authority to act against such improprieties, should use such a piecemeal approach to solve a problem that has been persistent for many years and have cost tax payers and the nation so dearly? The reason for that is very simple; our government has no system upon which to find out what is a fair price for petrol and regulate the market accordingly. The only system in place is the monitoring done by (MED) which is only indicative and has no compliance effect.
I am against strict regulation of the market or the prices because it is not practical and does not work, but I have called for regulatory guidelines that will at least keep the prices floating within reasonable limits and hence ensure a minimum safeguards against over-pricing. Without such guidelines government officials will continue to make calls of this kind and oil companies will always answer back to defend their position. The truth is that government argument (although correct in principle) is not based on solid evidence supported by facts and figures but based only on market indications and comparisons that can not make a very strong case for action, hence such calls will not give tangible results.
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The top story of the year is that global crude oil production peaked in 2008.
The media, governments, world leaders, and public should focus on this issue.
Global crude oil production had been rising briskly until 2004, then plateaued for four years. Because oil producers were extracting at maximum effort to profit from high oil prices, this plateau is a clear indication of Peak Oil.
Then in July and August of 2008 while oil prices were still very high, global crude oil production fell nearly one million barrels per day, clear evidence of Peak Oil (See Rembrandt Koppelaar, Editor of "Oil Watch Monthly," December 2008, page 1) http://www.peakoil.nl/wp-content/uploads/2008/12/2008_december_oilwatch_monthly.pdf.
Peak Oil is now.
Credit for accurate Peak Oil predictions (within a few years) goes to the following (projected year for peak given in parentheses):
* Association for the Study of Peak Oil (2007)
* Rembrandt Koppelaar, Editor of “Oil Watch Monthly” (2008)
* Tony Eriksen, Oil stock analyst and Samuel Foucher, oil analyst (2008)
* Matthew Simmons, Energy investment banker, (2007)
* T. Boone Pickens, Oil and gas investor (2007)
* U.S. Army Corps of Engineers (2005)
* Kenneth S. Deffeyes, Princeton professor and retired shell geologist (2005)
* Sam Sam Bakhtiari, Retired Iranian National Oil Company geologist (2005)
* Chris Skrebowski, Editor of “Petroleum Review” (2010)
* Sadad Al Husseini, former head of production and exploration, Saudi Aramco (2008)
* Energy Watch Group in Germany (2006)
Oil production will now begin to decline terminally.
Within a year or two, it is likely that oil prices will skyrocket as supply falls below demand. OPEC cuts could exacerbate the gap between supply and demand and drive prices even higher.
Independent studies indicate that global crude oil production will now decline from 74 million barrels per day to 60 million barrels per day by 2015. During the same time, demand will increase. Oil supplies will be even tighter for the U.S. As oil producing nations consume more and more oil domestically they will export less and less. Because demand is high in China, India, the Middle East, and other oil producing nations, once global oil production begins to decline, demand will always be higher than supply. And since the U.S. represents one fourth of global oil demand, whatever oil we conserve will be consumed elsewhere. Thus, conservation in the U.S. will not slow oil depletion rates significantly.
Alternatives will not even begin to fill the gap. There is no plan nor capital for a so-called electric economy. And most alternatives yield electric power, but we need liquid fuels for tractors/combines, 18 wheel trucks, trains, ships, and mining equipment. The independent scientists of the Energy Watch Group conclude in a 2007 report titled: “Peak Oil Could Trigger Meltdown of Society:”
"By 2020, and even more by 2030, global oil supply will be dramatically lower. This will create a supply gap which can hardly be closed by growing contributions from other fossil, nuclear or alternative energy sources in this time frame."
With increasing costs for gasoline and diesel, along with declining taxes and declining gasoline tax revenues, states and local governments will eventually have to cut staff and curtail highway maintenance. Eventually, gasoline stations will close, and state and local highway workers won’t be able to get to work. We are facing the collapse of the highways that depend on diesel and gasoline powered trucks for bridge maintenance, culvert cleaning to avoid road washouts, snow plowing, and roadbed and surface repair. When the highways fail, so will the power grid, as highways carry the parts, large transformers, steel for pylons, and high tension cables from great distances. With the highways out, there will be no food coming from far away, and without the power grid virtually nothing modern works, including home heating, pumping of gasoline and diesel, airports, communications, and automated building systems.
It is time to focus on Peak Oil preparation and surviving Peak Oil.
http://survivingpeakoil.blogspot.com/
http://www.peakoilassociates.com/POAnalysis.html
Dear Dr Wirth
Thank you for your comment.
As I have mentioned in one of my postings, "Peak Oil" is coming, however, there are few main factors that will greatly influence its timing:
1- How drastic the measures will be taken by the world community to reduce carbon emission?
2- The effects of present economic recession and its duration on the consumption of carbon fuels?
3- The effect (and duration) of present crude oil prices on the discovery, investment and development of new and existing oil fields and non-conventional oil like sale or oil sands.
4- Any eventual break-through in the development of electrically driven cars as well as other sources of energy as a replacement to present oil fueled engines for the transport sector (aviation in particular)?
Quite frankly, all the above factors are so interconnected that one can not predict when peal oil will come? However and in view of the still (untapped) vast oil reserves in places like Iraq, Iran and Caspian sea as well as possible future discoveries in deep water or the poles, my modest estimate that we will see peak oil in the true sense of the word around 2030.Best regards
Mundher Al-Saleem
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