Peak oil and Iraqi oil

Kimmo Klemola
05.05.2006

Peak oil

I've seen predictions that petroleum consumption rate will go from current 83 up to 120 million bpd (barrels per day) in 2025. Others predict that the peak production rate may already have been reached and that the rate can be as low as 60 million bpd in 2025. One thing is sure: in long term the consumption cannot exceed production.

"In the January 2004 Current Events on this web site, I predicted that world oil production would peak on Thanksgiving Day, November 24, 2005. In hindsight, that prediction was in error by three weeks. An update using the 2005 data shows that we passed the peak on December 16, 2005... That's it. I can now refer to the world oil peak in the past tense. My career as a prophet is over. I'm now an historian." [1]

"We are finding less and less oil in spite of vigorous efforts, suggesting that nature may not have much more to provide... Oil peaking is a liquid fuels problem, not an 'energy crisis' in the sense that the term has often been used. Motor vehicles, aircraft, trains, and ships simply have no ready alternative to liquid fuels" [2]

Cheap oil

With the price of a cup of coffee you get five liters (about one and half gallons) crude oil, which was made 200 million to billion years ago. This is like dollars raining from sky. High car registration fees, heavy gasoline taxation, legislation etc are needed to decrease irresponsible consumption of oil.

"We should lessen our demand and conserve what is left. By inference that will reduce dependence on the Middle East. There is one simple way of doing this, and that is to raise gasoline taxes in the U.S." [3]

China has multiplied their car sales and halved their bicycle sales in a decade. Also I do not support the idea that 3.4 billion Asians start to fly around the globe just for fun. Good news for automakers and for Boeing and Airbus, but is it really good news?

Iraqi oil

It is estimated that Iraq's oil reserves are about 260 000 000 000 barrels. This multiplied by US$75/barrel = US$19 500 000 000 000 present value = US$19.5 trillion + huge untapped natural gas resources (US$10 trillion?) – makes it US$29.5 trillion. These figures can be compared with the cost of war so far (http://costofwar.com) – US$0.279 trillion.

Also it is not about money. It is about economy, it is about the continuing of the life styles in the first world. Oil runs everything. Try filling your SUV with dollars.

Iraqis are rich. You divide the above figure 29.5 trillion by 26.8 million (Iraqi population) and you get over one million dollars per capita wealth buried underground. If you rob somebody, you better rob the rich and weak. Bush administration knew that all too well. Iraqis had something USA does not have but they desperately need.

"Oil prices that far north of $100/barrel would almost certainly trigger massive, last-ditch global resource wars as the industrialized nations of the world scramble to grab what little of the black stuff is remaining.

...The true consequences of Peak Oil cannot be acknowledged in such a highly public forum (US Congress) without crashing the financial markets or begging the obvious yet politically-dangerous and 'patriotically-incorrect' question:

Is the war in Iraq really a war for the world's last remaining significant sized deposits of oil?" [4]

References:

Deffeyes Kenneth S., Join us as we watch the crisis unfolding, http://www.princeton.edu/hubbert/current-events-06-02.html, February 11, 2006.
Hirsch, R.L., Bezdek, R.H, Wendling, R.M. Peaking of World oil production: impacts, mitigation and risk management. DOE NETL. February 2005.
Judis John B., Oil crisis, The New Republic Online (www.tnr.com), February 14, 2006.
Savinar Matt, Life after the oil crash, http://lifeaftertheoilcrash.net.

I recommend the above links for further reading.

Energy blog
www.dontfly.org