Friday, July 08, 2005

Oil gone

I told my friend Dan that he needs a blog, He wrote the intro:

A little story has gotten buried in the last day or two. You see, in the last few months, certain experts have come forward with the alarming news that the Saudi Arabians have been greatly exaggerating the amount of oil that they have left in the ground, their "proven oil reserves." In reality, these experts say, the biggest oilfields are nearing depletion, and the smaller ones are smaller than is claimed.

"Nonsense," said the authorities, the lying idiots who have seized power in this country. To back up the authorities, the Associated Press and the rest of the corporate media put out a series of "news" articles explaining that Saudi oil production will continue to increase for several more decades. Most of you probably caught these stories. Very reassuring.

Well, um, uh. While everyone has been focusing on the terrible explosions in the London mass transit system, it seems that the Saudis have started to confirm the reports by the real experts. The Saudis are beginning to run out of oil.


U.S. foreign policy, such as it is, has been structured around protecting and reserving oil fields around the globe for Western corporations. American soldiers are dying in Iraq, partly to protect the biggest oilfields of all in Saudi Arabia. But, it turns out that there isn't all that much oil left to die for.

Let's consider the seriousness of no oil:

1) FOOD: In the United States, food production is based on fertilizer. Fertilizer is made from oil. If there is no oil, there will be no food. Or other crops, like cotton. And forget about ethanol, which is made from biomass, which is produced with fertilizer.

2) TEXTILES: As you read this, you are probably wearing synthetic clothing from neck to foot, all made from oil. Without oil, you will need to hide your nakedness with animal skins, and perhaps wool from grass-fed sheep.

3) PLASTICS: Made from oil. Look around you. How many things can you see that are NOT made from plastics or similar materials?

4) SHIPPING: Why does Wal-Mart have such low prices? By producing their merchandise on the other side of the world, where labor is dirt cheap, and shipping the crap to your local auto slum. The only reason they can do that is because of cheap oil to fuel transport. So ask yourself this... how many everyday products are manufactured within a hundred miles of where you live?

5) GASOLINE, ETC: Let's not forget the gas pump. How will the suburbanites find food if there is no gasoline? And how will any of us stay warm without oil?

The drunken party is almost over and the cops are on their way. Everything you take for granted is dependent on cheap oil and is about to disappear. Sorry... but that's the way it is.

From The Economist, which is not exactly "liberal media." Link at the end.

Saudis warn of shortfalls as oil hits $61
By Carola Hoyos and Neil Dennis in London
Published: July 6 2005 22:02 | Last updated: July 6 2005 22:02

Oil prices hit new record highs above $61 a barrel on Thursday, driven by short-term supply fears as the first hurricane of the season threatened crude production and refinery operations in the Gulf of Mexico.

But private warnings also point to a worsening long-term outllook, with Saudi officials saying that the Organisation of the Petroleum Exporting Countries will be unable to meet projected western demand in 10 to 15 years.

At today's prices, the world will need the cartel to boost its production from 30m to 50m barrels a day to 50m by 2020 to meet rapidly rising demand, according to the International Energy Agency, the energy watchdog for consuming countries.

But senior Saudi energy officials have privately warned US and European counterparts that Opec would have an “extremely difficult time” meeting that demand. Saudi Arabia calculates there is a 4.5m b/d gap between what the world needs and what the kingdom can provide.

Saudi Arabia has the world's largest oil reserves and will need to bear up to half Opec's production growth in the next 10 to 20 years, with the rest mainly coming from Kuwait and the United Arab Emirates.

Saudi Arabia pumps 9.5m b/d and has assured consumer countries that it could reach 12.5m b/d in 2009 and probably 15m b/d eventually. But a senior western energy official said: “They said it would be extremely difficult to move above that figure”.

But European officials hope that energy saving measures could curb oil demand. They believe Opec could produce the 44m b/d the world would need if consumers adopted efficiency measures under discussion by governments in the US and Europe.

G8 leaders are expected to discuss the high oil prices during their three day summit which began in Gleneagles, Scotland, on Wednesday.

Fears that US refineries are ill-equipped to meet winter demand for heating oil and other distillates have driven crude prices more than 9 per cent higher in the last week.

These concerns were compounded on Wednesday as Chevron, Shell and BP all reported they were evacuating workers from platforms in the Gulf of Mexico as tropical storm Dennis was upgraded to hurricane.

These concerns were compounded on Wednesday as Chevron, Shell and BP all reported they were evacuating workers from platforms in the Gulf of Mexico as tropical storm Dennis was upgraded to hurricane

The August West Texas Intermediate contract on the New York Mercantile Exchange hit a record $61.63 in early electronic trade, while on London’s International Petroleum Exchange, the front-month Brent crude contract climbed to an all-time high of $60.26 a barrel.

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