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Perspective on Oil Dependencies.
By Hakan Falk.
It does not take much knowledge in mathematics to understand that the equations in the demand and supply situation are impossible. See attached article from New York Times [Dec 27, 2002] WASHINGTON Dec. 25. We have said this many times in our discussions, "Middle East have 70% of the oil reserves, Iraq and Saudi Arabia have more than half of those". According to professor Hubbert's calculations for production from finite resources, Middle East is at the moment at the peak of production capacity and will not have the capacity to meet the future demands. Professor Hubbert's methods have proven to be quite accurate during the last 35 years of experiences.
It is no relief for the world and it is no escape from the dependence of Middle East oil reserves. US who is taking around a quarter of all current oil production, or half of the industrialized countries use of oil, is already at a difficult junction. They have to choose if they are going to secure the oil supplies by force and occupation or trust democratic and peaceful means. The peaceful route is very insecure, especially with the current Israel - Palestine problem, that have to be solved very fast if it should be possible.
Israel is a loose canon with its current policies of occupation and suppression. UK and US are in favor of the occupation of Iraq. They would in this case secure the Iraqi oil and with enough troops in Iraq, they would have sufficient pressure on Saudi Arabia to make them walk the line. Iraq with Saddam Hussein nor the Palestine resistant movements are smart enough to realize that a confrontation policy is at this time the worst they can do, since it gives US and UK the alibi for occupation. All alternatives in this equation is high risk games and can backfire. The occupation alternative has a very short window of opportunity, if it should have any excuses based on war against terrorism or weapons of mass destruction. Passing this window, an occupation have to be done in the light of a brutal and illegal occupation, against a popular world opinion, including lack of the popular support in UK and US. This is maybe impossible to do and therfore the pressure on US and UK to act now is very large.
The oil industries are not helping and are basically divided in two camps. The Dutch based Shell and some other minor oil companies, against the US, UK and other major oil companies. It is almost pathetic to see the resistance towards ethanol and biodiesel/SVO, with the propaganda war in Australia as the current and most visible example. It is also pathetic to see the slow phase of implementing energy saving measures. This in a time when our achievements the next 10 to 20 years are going to be the most crucial in modern times.
Some are speculating in what will happen to oil producing areas, when they totally depleted their oil reserves. This will probably never happen. Their production will of course go down, since a large part of the oil reserves are still there, but today not economically retrievable. Oil will be very expensive and also all the products around it, many that will be very hard to find competitive substitutes for. The area will export less, but get much more money for the oil. The concerns should instead be focused on what will happen to the consuming industrialized countries of today and especially US. They would be like very big trucks that suddenly lost their engines in the middle of the desert. The people in the industrialized countries are not used to the hardships that exist in other parts of the world and will maybe go to war in trying to get what is available. So the question should not be what happens to the producers, it should be what happens to today's consumers?
It is several possible scenarios, all of them will be difficult for future generations. "Ready to use" technologies on short term are many. Ethanol, Biodiesel, SVO, WVO, Synthetic fuels and LPG from coal, Biogas from trash and waste, Wood, Waste from agriculture (that are not needed for fertilization), Active and passive solar, Wind, Hydropower, Energy conservation, etc. The whole portfolio has to come into play, but the most important will be energy conservation. On longer term (50-100 years) hydrogen might be something, if they find cheap catalyzes who are readily available and can sort out the processes. Active solar that now can produce electricity with 30% efficiency and is probably the most efficient energy converter to date, it is very promising but does not solve all the problems. Hydropower as energy storage is already in use and will probably find new uses.
In the industrial nations, a key element is the replacement cycles of equipment for distribution and use of energy. Examples of this is the automobile sector that replaces a major part of the fleet in 10 years, transportation in 15 to 20 years, equipment use in building constructions 15 to 25 years and the buildings themselves in 50 to 100 years. This is a major problem and disqualifies most of the solutions that are still in the research phase as immediate "ready for use", it does not matter how interesting they are. In this matters it seems that the EU are well ahead of US and they understand the social implications much better. One very telling example is that all vehicles produced in EU after 1996, are prepared for use with biofuel mixes.
For emerging industrial nations and developing countries, it is no space in the oil equation. It does not take much of mathematical and political knowledge to come to this conclusion. The only road to continuing development is aggressive energy conservation and alternative energy sources. Those countries do not have an existing high level of energy use and will be able to grow sustainable energy resources in phase with growing demands, their dependence of replacement cycles are much less than the industrialized countries. Considering this situation, the emerging economies that understands this, have a golden opportunity to proceed with less upheaval than the industrialized countries. The successes are gong to be measured in how fast and far they can develop without oil dependence. Brazil's renewed commitment to biofuels is a good example on understanding of the situation.
Hakan
Interesting links on the subject:
Linchpin of a New Oil Order.
The Business of War.
Greasing the Skids of Corruption.
The Curious Bonds of Oil Diplomacy
BP chief fears US will carve up Iraqi oil riches.
The links supplied by Keith Addison.
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