Monday, July 09, 2007

From Lost into the River

The Seventh Seal - Bergman
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The Spanish expression, "de perdidos al río" (from lost into the river) means that a situation bad enough on its own count, (being lost) is further aggravated (by falling into the river). It means, of course, "from bad to worse", but I think you'll agree with me that it's a whole lot juicier.

Those were the words that leaped into my mind on reading this article from The Wall Street Journal, de perdidos al río. With the oil supply tightening terminally... what a time for the USA to get its butt royally kicked in the Middle East. DS
IEA Warns of Impending Crunch in Gas Supply - Wall Street Journal
Abstract: In a dire forecast, the Paris-based International Energy Agency is warning of an impending crunch in the supply of oil and natural gas needed to power world economic growth in coming years. The IEA is the energy watchdog of the world's 26 most-advanced economies, and its pessimistic assessment is contained in its latest annual medium-term forecast to 2012, which was released Monday. The agency expects oil supply to be tighter in coming years than it had previously forecast, with little prospect of relief except a possible easing should world economic growth falter.(...) The IEA now forecasts that the Organization of Petroleum Exporting Countries will have precious little spare capacity left to pump extra oil by 2012. It also expects supply increases from non-OPEC oil producers and biofuel producers to start flagging after 2009. Natural-gas markets will also be tight because of inadequate supply increases, limiting the ability of consumers to switch between oil and natural gas. Still, demand for oil and gas is expected to grow at a brisk pace in the years to 2012.(...) OPEC spare capacity, the safety cushion in the world system, is expected to remain constrained until 2010, then shrink to minimal levels by 2012, when the exporters collectively will only be able to pump a paltry extra amount -- the equivalent of 1.6% of world demand. While the IEA didn't say so, the shrinking of OPEC's spare capacity in the past decade has made the oil market skittish about any development that could conceivably threaten supply, resulting in volatile markets and prices.


Anonymous said...

I was amazed by this report. I have been reading about the possibility of peak oil for about 2 years now and have wondered why the subject was not being discussed seriously. If the peak oil hypothesis is correct, it means the end of a lot of things we, especially Americans, have taken for granted. The fact that the IEA has called it plateau oil means they have pretty much accepted the theory, or at least consider its probability high enough to start planning for it.
I think this is a very welcome development and I hope the Europeans continue to inject a little sanity into our discourse. Living in the United States for the past six years has been like living in an Alice in Wonderland story. Every day, I figuratively bang my head against the keyboard in horror.
I really enjoy your commentaries and links. Thanks!

Anonymous said...

I know that 'peak oil' is accepted reality by my govt, they have had documentaries on the national broadcaster and have issues policy papers in various 'economic think tanks'.

We know it will happen, our nation as a marginal sea-trading nation will be amoung the first to suffer.

The IEA by leaving off news of this type for so long has in fact harmed humanities hopes for dealing with peak oil in a sensible way.

One thing is for sure, we here on the net may be the first and the last to comunicate this way en masse.

Any leftist worth his salt knows that the Capitalist system as a basic requirement needs to expand, if it stagnates then it collaspes since capitalism assocaites progress with the greed and profit motives. With little or no chance of profit then progress under that ideology ends.
What they call 'prductivity gains' and is in fact taking a greater portion of labour that workers create than is possible provides the collateral for more money to be loaned out, for this reason Capitalism is inheritanly a weak system, since when say costs rise too fast (like during an enery crisis), productivity gains end, and banks cannot make money from the loans they have given.
With less money in the economy, prises rise slower or not at all (good for workers bad for the rich). Eventually as contracts dry up, layoffscome along and the economy shrinks, this is a true 'depression'.
This is what 'peak oil' is heralding, and the oil world knows it, but wont do anything. for the west, this is a greater danger than global-warming!