Is the Oil Era Coming to an End?

Asharq Alawsat ^ | 30/07/2006 | Amir Taheri

[humint]

Within the next weeks, the British government is expected to unveil its strategic energy plan for the next quarter of a century. According to those familiar with the draft, the plan is build around a single motto: energy security.

The United Kingdom is not the first major industrial power to put energy security top of its national agenda. In the United States, President George W Bush made that a priority of is administration over two years ago. Since then France, Germany and Japan have also begun to rethink their long-term energy strategies. In every case, the strategy adopted is aimed at reducing dependence on imported oil and natural gas by developing alternative sources of energy, notably nuclear.

It was no accident that the latest G-8 summit, hosted by Russia in Saint Petersburg, was built around a discussion about energy security, with President Vladimir Putin casting himself in the role of a reliable supplier in an uncertain global energy market.

Also present at Saint Petersburg was Brazil's President Igancio Lula da Silva with proposals to tell his Latin American giant of a country the principal exporter of bio-energy, the environmentally friendly alternative to fossil fuels.

The quest for alternative sources of energy is not limited to governments. Almost all the major oil companies have set up new units to look for non-fossil fuels while several car manufacturers plan to invest in developing engines that use alternative sources of energy. (This month Ford announced plans to £1 billion on such research in Britain.)

Until even a couple of years ago, experts believed that oil would remain the principal form of energy at least until the middle of the current century. Now, however, many experts envisage a shorter lifespan. One minister from a major Arab producer told me recently that he now believes oil would lose its current dominant position within the next three decades at most.

Why are those who once so eagerly sought oil now seek to flee from it as fast as they can?

The obvious answer may be the sudden rise in oil prices over the past tree years.

The money paid by oil importing nations to exporters over the past decade looks like the largest transfer of wealth from one part of the world to another since the Spanish looted South America's gold and silver. That answer, however, may be misleading. For even at $75 per barrel, crude oil today is cheaper than in the mid-1970s in constant dollars. In fact, compared to recent increases in prices of raw materials across the board, the rise in oil prices falls below the median.

The attempt to move away from oil may be motivated by other considerations. Chief among these is the realisation that with the arrival of hundreds of millions of new consumers in the energy market- especially in China and India- there will simply not be enough oil to go around. By mid-century, China and India may well have a combined population of almost five billion. Even if they were to stabilise per capita oil consumption at current levels , say in Belgium, there would not be enough known oil reserves in the world to satisfy their needs for more than a couple of decades.

All that means that the era of easy access to oil may be over. Those who want oil will soon have to fight for it. The demagogic slogan "no blood for oil" is already popular in the West, although, as yet, it there is no war for oil.

Another consideration for the quest to move away from oil is the growing popularity of doomsday scenarios based on real or imagined climate change. Even the Bush administration, regarded as the last bastion of sanity against climate doomsters, now admits that global warming may be something more than a figment of scientific imagination, after all.

Many consumers, especially in the major Western markets, are also concerned about some of the regimes that control the world's oil resources. The image of President Mahmoud Ahmadinejad of the Islamic Republic threatening a war of civilisations may appear as mildly amusing to most Iranians. To most Westerners, however, it is a disturbing image. Venezuela's populist caudillo Hugo Chavez may charm Latin Americans with his mock Bolivarian rhetoric. However, he also frightens oil importers in the West. The fact that a good part of the world's oil reserves is in some of the most unstable and strife-ridden corners of the globe is not reassuring.

Finally, there is the popular assumption in some importing countries that the money spent on oil supports undemocratic and even despotic regimes in exporting states some of which even sponsor international terrorism. No nation worth its salt would wish to be held to ransom by a handful of despotic or at least autocratic regimes that control the spigots.

The situation as seen by many the largest oil consuming nations looks like this: one is paying a high price for a commodity that is finite in quantity, props up unsavoury regimes, finances terrorism, and, last but not least, destroys the environment.

The former Saudi Oil Minister Ahmad Zaki Yamani once observed that the age of oil would not end simply because supplies might run out. After all, he quipped, the Stone Age did not come to a close because the world was short of stones. What brought the Stone Age to an end was a cultural and political sea change that, in turn, inspired a technological revolution that developed alternatives to stone.

Whether or not we are witnessing a similar sea change in the case of oil is hard to tell. What matters, however, is that the world should not be invited to jump from the fire into the frying pan. And yet, this is what many nations, including some major industrial powers, seem to be doing by planning a massive switch to nuclear energy.

Nuclear energy may well cover some of the concerns with regard to dependence on finite and uncertain oil supplies. But, this new magic wand raises a whole host of other, perhaps graver, questions to which there are no obvious answers. The world should take a deep breath and consider practical ways to address the legitimate concerns of both exporters and importers of oil over the next three decades or so that is left of the "Age of Oil". A hastily concocted energy strategy may give too many hostages to fortune in an era already beset by uncertainty.

[humint]

Amir Taheri was born in Iran and educated in Tehran, London and Paris. Between 1980 and 1984 he was Middle East editor for the London Sunday Times. Taheri has been a contributor to the International Herald Tribune since 1980. He has also written for The Wall Street Journal, The New York Times, and The Washington Post. Taheri has published nine books some of which have been translated into 20 languages, and In 1988 Publishers'' Weekly in New York chose his study of Islamist terrorism, "Holy Terror", as one of The Best Books of The Year. He has been a columnist Asharq Alawsat since 1987

[GeronL]

A Republican Plan for alternative clean energy

[308MBR]

It will never happen until the price of petroleum fuels outweighs the cost and aggravation of alternative sources. Believe me, there is a LOT of aggravation in alternative fuels in daily operation compared to petroleum products.

Bring on the $8.00/gal gasoline and diesel! Until then, stop whining.

[Schweinhund]

Hm, I think it's a little keen to hint that Germany is trailing behind the US in the question of energy security. I would even say we're at the forefront with ecological energy production and the hydrogen cell, and the debacle with that crook Schroeder indicates that while he was making sure it was to his benefit, he was at least asking the right questions about Germany's future needs.

[USF]

>Thomas Gold PING.

[NormsRevenge]

In every case, the strategy adopted is aimed at reducing dependence on imported oil and natural gas by developing alternative sources of energy, notably nuclear.

--

nuclear,, not solar, not hydro,, ,, nuclear

Thanks for posting this

[spinestein]

[...age of oil would not end simply because supplies might run out. After all, he quipped, the Stone Age did not come to a close because the world was short of stones. What brought the Stone Age to an end was a cultural and political sea change that, in turn, inspired a technological revolution that developed alternatives to stone.]


Correct. Fossil fuels will never again be cheaper than they are now but must become progressively more expensive, as the supply is nonrenewable and the demand for energy can only increase exponentially. At some point in the next few decades, alternatives will make more economic sense for everyday mass energy use, and gasoline will be a luxury fuel, like when "Grampa Steve" takes his antique 2006 Dodge Viper out for a spin. :^)

[kittycatonline.com]

Bring on the $8.00/gal gasoline and diesel! Until then, stop whining.

Just a moment ago in a separate post, I postulated that this could be the one area of commonality we might share with the greenies; the desire to reduce our dependence on oil. The more I think about it though, the more I see those greenies running to the courthouse to file injunction this and injunction that to stop folks from doing any real work on alternative fuels.

"Oh, you're not Jane Fonda. If you burn used french fry grease in your big redneck diesel truck, you'll be releasing deadly toxins into the environment. Only us anointed Protectors of Mother Earth are permitted to use the land and her materials for our purposes. Only our people are permitted to ride our preppie BMW touring motorcycles, not those filthy Harley Davidsons you slobs use. Only our people are permitted to use fossil fuels for making our Birkenstocks. You are not permitted to burn wood, that's wasting our forests. You are not permitted to turn corn into ethanol, that corn is genetically modified. You are not permitted to even fantasize about using coal for any purpose at all, you can't even put it in a Christmas stocking because we hate Christmas since it's a religious holiday and we hate all religions except the Religion of Peace. You may not use hydrogen since it uses nasty toxic chemicals to produce it. You may not use natural gas since you'll have to drill to get it and you'll damage the precious environment. You may not use electricity since you'll have to store it in batteries, and of course those are deadly. Mind you, our people are free to use batteries all we like, since we'll be using iPods to listen to trendy music and we'll be using our cell phones to arrange our next Sierra Club outing. You may not use nuclear energy, you many not even discuss it. Anything with "nuclear" or "atomic" in it is bad bad bad. Did we get eveything? Well, we'll let you talk quietly about wind energy, and solar energy, but we'll need you to pay our biologists huge sums to conduct enironmental impact studies first. Of course, if we don't like you, we'll say the wind turbines hurt the birds and the solar panels block the sunlight from hitting the dirt underneath. Basically, we envronmentalists are the natural overlords and protectors of Mother Earth's bounty, and you primates are simply here to abuse her."

[humint]

ARTICLE: The money paid by oil importing nations to exporters over the past decade looks like the largest transfer of wealth from one part of the world to another since the Spanish looted South America's gold and silver.

308MBR: Bring on the $8.00/gal gasoline and diesel! Until then, stop whining.

Look past the pump for a sec. When you fill up, who gets your treasure? What do you suppose they do with it? Gas will never make it to $8.00/gal because the Islamic Revolutionary Guard Corp will have enough resources to aggravate you to death.

Obedience to Khamenei is obedience to Imam Khomeini

[Andy from Beaverton]

When the wells run dry, so will islam.

[timer]

Well, the cassini spacecraft just discovered whole hydrocarbon oceans on titan. If the pols are really hot after CxHx, send them there to get it, naked, with buckets. Actually it's in the Book of Revelation : 200 million chinese invading israel to lap up the last dregs of mideast oil. It happened before : the mongol invasion, history repeats itself. The real problem though is TOO much energy in human hands. Where does the WASTE HEAT go when everyone, including whacko terrorists, children, idiots; have whole atomic bombs worth of free energy to play with? Do you leave a loaded gun in a nursery for little children to play with? Yes, we've long had the answers : blacklightpower.com and cheniere.org; but how much is it worth if it brings about the complete extermiation of the environment(and human race)because we're not mature enough yet to handle TOO MUCH ENERGY?

[Mac1]

"Bring on the $8.00/gal gasoline and diesel! Until then, stop whining."

Here in the UK the price is £5 or near to it - about $9.50 at today's rates. Its headline news from time to time but there's no crisis or anything yet.

[Mac1]

Thanks for posting. I've only read a small number of this bloke's articles which I've found to be reasoned, logical, unemotional opinion as well as being informative. This didn't disappoint.

[humint]

Correct. Fossil fuels will never again be cheaper than they are now but must become progressively more expensive, as the supply is nonrenewable and the demand for energy can only increase exponentially. At some point in the next few decades, alternatives will make more economic sense for everyday mass energy use, and gasoline will be a luxury fuel, like when "Grampa Steve" takes his antique 2006 Dodge Viper out for a spin.

The impact of energy on our economy has an evolutionary effect. The specialization that certain fuels allow becomes like pillars propping up our economy. When the supply of those fuels is threatened… recall the extinction of the dinosaurs? Entire swaths of our economy will become extinct, virtually over night. The folks whom are eager to say alternatives are the answer, are rarely engineers. If they are, they should be aware of the kind of the incredible lifestyle changes their alternative will require. I’m an engineer and when I talk lifestyle changes I’m referring to the kind of changes people do not make unless they are forced to make them. Necessity is the mother of invention. Necessity is measured in blood and starving children. This most recent generation of Americans is numb to such things…

[WoofDog123]

i have always thought the reason the western european economies (particularly the UK) absorb the very high tax on petrol is 1) avg. distance goods travel by truck is much lower and 2) you have a functional mass transit AND inter-city transit system. If we had 9.50/gln gas here we would not have an economy.

[spinestein]

[When you fill up, who gets your treasure?]

The federal government makes more profit than anyone else.



[What do you suppose they do with it?]

They waste at least two thirds of it to internal bureaucracy, fraud and corruption.

[spinestein]

[When the wells run dry, so will islam.]



I don't share this view. There were Jihadists running around cutting off peoples' heads and trying to convert the rest of the world to their version of Allah worship at the point of a sword long before the first barrel of oil was pumped out of the ground, and there are plenty of countries today which sponsor Jihadism yet don't have a drop of oil or any other thing of value to sell to the outside world.

[spinestein]

I looked and looked but I didn't see the sarcasm tag attached anywhere to your post.

[Mac1]

"1) avg. distance goods travel by truck is much lower and 2) you have a functional mass transit AND inter-city transit system"

That does make a lot of sense.

[spinestein]

You're foolishly taking a LONG TERM view.

People are only supposed to think 6 months to 2 years ahead, at most. We're supposed to stifle our concerns about the distant future until these concerns grow into problems and then the problems fester into crisis. Then we're supposed to run around like headless barnyard fowl until the crisis claims all it's victims and count ourselves lucky if we survive to ignore the next concern.

Sheesh, I can tell you're an engineer.