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    November 07, 2007

     Peak oil

    An interesting call:

    The major result from this analysis is that world oil production has peaked in 2006.
    From a report on crude oil supply by Energy Watch Group, a green German think tank.
    They may be wrong and are clearly outliers from the trade consensus. But they don't look like amateurs to me. They have an obvious green bias; but as they point out, the establishment represented by the IEA is biased towards the oil industry's endemic optimism.

    I liked their chart of 33 countries that have passed their oil peak (used by permission):

    Peak oil.jpg

    Doesn't leave many countries: just our stable democratic friends in the Gulf, Russia and Central Asia.

    The current oil price spike is not being matched by massively increased output anywhere. Saudi Arabia isn't acting as "swing producer" any more (chart page 45). The obvious inference, made by EWG, is that it can't. Saudi oil reserves are a state secret so both sides are reading tea-leaves.

    The oil peak (whether it's already happened or merely coming soon) is bad news for the world economy and international relations, good news for the climate and alternative energies. We have to face the music some day, and why not now? A switch from oil is forced upon us. The only real choice on primary energy is whether to go for coal, nuclear, or renewables. The worst of these by far is coal - the IEA shockingly foresees coal output rising by 73% by 2030. Absent a breakthrough on storage technology, I don't see how we can do without nuclear for a secure base-load supply. My grand-daughter will surely prefer to inherit her share of a manageable pile of radioactive waste than a world without Pacific atolls and polar ice.

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