Global oil consumption hit record high in 2010

Demand is outpacing supply as demand increases drastically causing supply shortfall

By Michael Smith (Veshengro)

Some illuminating new stats on global oil production, consumption, and the shifting landscape of oil producing nations.

Reports show that global oil consumption was up in 2010, bucking the trend for the two previous years under the grips of the Great Recession, increasing 2.7 million barrels per day (mbd )to a new record high of 87.4 mbd. Increases in global oil production, however, fell short of that by 900,000 barrels per day.

In other words, rising supply in not at all keeping pace with rising demand and consumption, something which everyone from the US military, to the IEA, to oil industry execs, and plenty of doom and gloom peak oil researchers (who likely will be more accurate than the technology optimists out there) have been saying for some time.

Exemplifying that growing supply and demand gap, and the dwindling supply of easy to get oil accompanied by the rise of tar sands and other so-called unconventional sources of fossil fuels, is Norway.

Once in the top 10 oil producing nations of the world, and one of the few nations which managed to escape the resource curse of oil while also having solid green credentials, in 2010 Norway's oil output dropped more than any other nation, by 9.4% to roughly 2.1 million barrels per day. It now occupies the 13th position.

Something which obviously doesn't sit well with Statoil, which has just released a statement saying that it expects to raise production “to above 2.5 million barrels of oil equivalents per day by 2020” and is positioned for long term growth.

Britain's North Sea oil (and gas) fields are also coming to an end of their productive lives and new sources do not seem to be forthcoming, not in the North Sea nor elsewhere. The trip to the Islas Malvinas, the Falkland Islands, and the surrounding waters, also drew a blank.

The rejiggered oil production rankings now have Russia leading the world (10.27 mbd) and Saudi Arabia in second (10 mbd). The US produces 7.5 mpd (and consumes a bit under three times that). China is now in fifth place, seeing the largest increase in production, with a bit over 4 million barrels per day.

Saudi Arabia, according, to sources, is, however, on the brink of running dry as well and that does not bode well for a lot of things.

The entire problem is not being helped one bit now by the crisis in Libya meaning that things will get worse in time to come. Then again oil is the very reason that we, that is to to say the USA, the EU and NATO are involved in supporting the Libyan rebels.

The action in Libya has about as much to do with human rights as the war against Saddam Hussein had anything to do with weapons of mass destructions. If it was human rights we were concerned about why are we not intervening in the former Rhodesia, now referred to as Zimbabwe, or Syria or Bahrain. In two out of the tree mentioned there is no oil and Bahrain is needed as a base for the US and British war ships thus we could not possibly upset the ruling family there. But I digressed. It was oil we were talking about and the disparity between demand and consumption and supply.

In order to level things out, it would appear, the US has, at the end of June 2011, released stocks from their strategic reserves. This was also a move in order to bring down gas prices at home and quieten unrest amongst motorist.

The fact that such reserves had to be released also seems to point to the fact that – unless the oil producing countries are sitting on their stuff (aside from no oil coming out of Libya) – the demand cannot be met anymore by current level of production.

Is the “end of oil” upon us sooner rather than we had assumed? It might just be.

© 2011

Post “Peak Oil” Transportation – The Bicycle

by Michael Smith (Veshengro)

Transportation after “Peak Oil” will be very much a return to the times before the motorcar and this will mean, theoretically, only three modes of transport for most people. In fact probably only two as the third may not be as feasible for those in the lower income brackets.

Once the balloon has gone up finally and the oil, the cheap and exploitable oil, is gone transportation will be different and we will have to return to walking and cycling and we want to look here at bicycles and maintaining them “after the event”, as I like to call it.

As said, aside from walking, for the great majority, adults and children, the mode of transport will be the bicycle but I think that, for ease of maintenance, we may have to rethink the kind of bike that we have and the gearing used.

The problem with the so-called Shimano gears with the derailleurs by the crank and especially by the cog wheel cluster on the back wheel is that those derailleurs are worked with wire cables (but then so are the brakes) and that they tend to be only effective for a number of years before they, especially the back wheel one, need replacing.

Those derailleurs can also be rather sensitive to impact and especially to mud and dirt. The springs, however, are their weakest points and ones they lose their strength they have an adverse impact on the cogs and thus can cause damage to the rest of the bike.

From what I have seen so far is that they appear to need replacement every five to eight years, depending on use of the bike, and that may be a problem for when we have lost the oil and motor transport and with it a great scale of manufacturing we will not be able to get those dérailleurs easily or cheaply.

The best way to prepare some bicycles that you have – and for this purpose some bikes that some people have discarded are ideal – and turn this bike or those bikes into single-geared ones.

Those are not the so-called fixed-gear ones that have also become rather popular in recent years but they do have freewheel hubs and, in fact, can be directly converted from a standard mountain bike wheel for instance.

There is no need to go through the rigmarole of taking the cassette off and replacing it with a single freewheel cog, saving thus cost, though it is true that, generally, the single cog seems stronger than those of a 5 or 6 or even 7 gear cassette. But not really by that much again.

I believe that single geared bicycles will be the ones that will get us through as they will be less liable to have problems as those with the gears. How many hours have I spent fixing and realigning gears I have not counted but sure enough many.

Yes, it is true that a single geared bicycle is a bit more hard work especially in rougher terrain and uphill but then, who said that you have to cycle up the hill; you do much better pushing the bike up and then coasting down the other side. That's how I do mostly, much to the annoyance of those that pedal like mad in low ratios and arrive up the hill all out of breath.

Also, do you think you really have 15, 18 or 21 (or even more) gears on those fancy bicycles that you see? The truth of the matter is that it is maximum 3 (in words: three) gears – the three cogs at the crankshaft with 5, 6, 7 or even more sub-gears for each gear, amounting to the number they like to quote of whichever amount of gears.

So, as you can see, really not much has changed since the three-gear hubs that came about in about the 1930s or so, though there remained the single-geared bike for many years still. They were the cheaper work horses.

It is easy and – I believe – worthwhile to convert an old bicycle or two, especially if you can get hold of them cheaply, to single gear.

“Building” a single-speed post “Peak Oil” bicycle

“Building” a single-speed post “Peak Oil” bicycle is a very simple undertaking for anyone with a little common sense and the wish to tinker around a little.

First you remove all the gear tools. This is to say you take off the front and the back dérailleurs with all the associated cables and hardware, including the gear changers on the handlebar (or wherever).

Then you shorten the chain – which will be rather longish – to fit relatively tightly from the second cog up on the back cluster to the middle cog (if you have three front cogs) of the ones where the pedal crank is.

And now you have a single-speed post “Peak Oil” bicycle and you are all set.

Shortening the chain: If you want to reuse the original chain that was on the bicycle – and not one with a “joiner”, as used to be the standard on the old style bikes – you will need a chain tool. This is definitely a tool worth investing in, as it will come in useful on many occasions when a bicycle chain needs repair.

A chain tool can be bought from the Internet and also instructional videos can be found there and instructional texts. However, I would recommend you purchase the tool at a bike store and ask one of the people there so show you how to use one.

If you have never used one of those tools before it is good to actually be shown – physically and actually – in person – how to “break” a chain and how to put it back together.

The chain, when you have shortened it, should be as tight as possible from the back cog to the front one as you no longer have a dérailleur acting as a chain tensioner.

Changing an old mountain bike from Shimano multi-gear to single-gear can be done in less than an hour.

When I am finished I am going to have at least two of these kind of rebuilt bikes, all made from salvaged old bicycles that were thrown out by folks.

THE REASON for advocating this simple bicycle for post “Peak Oil” transportation is because it should be very low maintenance and should be much less prone to problems than the bikes they are made from.

© 2010

To learn more about Peak Oil and what a society post Peak Oil might look like get and read the book “The End of Oil”. You can obtain the book via http://the-end-of-oil.blogspot.com/

How will the End of Oil arrive?

Will it be by stealth in increments or will it be over night?

By Michael Smith (Veshengro)

The answer is not an easy one for it could be either or the two or both.

We have already gone past “Peak Oil”; at least according to most of he experts, and we must, therefore, anticipate the end of cheap oil to be upon us very soon indeed.

The way we may be feeling it initially will be via ever increasing fuel prices at the pumps which the governments will be blaming on the greed of the oil companies and while there is some truth in that – they are running out of the stuff so they want to make as much profit before they have to change what they do – most of the increases will be due to the fact that they are running out of the easily extractable oil.

The BP Deep Water Horizon rig disaster in late May 2010 in the Gulf of Mexico is also due, in part, to this.

They were in a hurry to bring that well, just recently opened, on stream and tried to save – for reasons as much as costs – and left out the second blowout preventer, which would have been the norm.

This action points to the fact that we are already in trouble as far as oil supplies are concerned.

The cost of extracting oil from the Tar Sands, which is a case of expending about half a barrel of oil to gain one, also points to the desperate situation and the oil company geologists and the governments know full well that the “normal” oil wells are running dry and that many of them have basically done so already.

As both the oil companies and our governments are fully aware of the fact that cheap oil, at least, is running out and will soon be history, and all the oils that can still be extracted at a reasonable costs, initially everything will happen incrementally, I should think, in that fuel prices will rise to such an extent that the ordinary punter will no longer be able to afford to drive and the ordinary farmer no longer be able to afford to run his machines.

But the other possibility also remains and that it is going to happen with a quiet bang, overnight, without a warning.

Overnight, literally, without a warning, the gas stations will be shut and that those still left open will be for use by government vehicles only and will be guarded, with the use of deadly force authorized.

The ordinary you and I will find ourselves high and dry and will find that those guards, who will have, as said, authority to shoot to kill, will keep everyone away from the still existing gas supplies.

This means that, either way, the ordinary driver – of which I am not one, as I do not drive – will not be able to get any gas, aside from the fact that most of us would not be able to afford it.

Five dollars a gallon will then appear cheap to the Americans and fifteen Pounds a gallon for the British, who always were used to high prices, really, due to the high fuel taxes in the United Kingdom.

While the incremental will happen I am more convinced that we will get faced with the event of “zero gas” in an overnight action.

We will find that from one day to the next most gas stations will have no longer any gas, and the gas that they had will have been transferred to elsewhere and the ones that will be open still will be left open for use by government vehicles only. The ordinary person will no longer have access to gasoline or diesel and, more than likely, even heating oil.

Without gas most people will be stuck where they are and many cars may, in fact, fail on the road for lack of fuel while their owners are driving around looking for open gas stations that will serve them.

Being unable to drive their cars will mean that getting to and from work will be a little on the difficult side, to say the very least. It is not easy commuting by bicycle from Hayward's Heath to London, and such.

The lack of suddenly not being able to drive, considering the kind of car-oriented culture that we are in most of Europe and North America (and Australia), could mean serious problems indeed, especially in that some people, believing that they are “entitled” to gas for their cars might get rather angry, to put it mildly.

When we suddenly find ourselves in this situation, a Mad Max scenario is easily imaginable. A scenario of riots in the streets with people demanding fuel for cars and homes where there is none – to some degree – and armed police and the military being used to suppress such demonstrations and riots.

Let me once again say that I am surmising here as I neither have a working crystal ball nor a direct line to the heavenly rulers, and neither do the governments or the so-called faith leaders, by the way.

This does sound, I know, all more than a little doom and gloom but what I am trying to do is issue a warning that these are possibilities and probabilities that might soon be upon us. Then again it could all be a smooth and easy transition.

The governments are trying the damnedest to get people out of their cars, and have been trying to do this ever since the 1970s, employing various ploys and reasons, and into walking, onto their bikes and into pubic transport. So far with very little result.

Taking the hint and transitioning to a more-or-less car-free world would help a great deal and some people are already doing it and it will be those that are best equipped for it when it all goes pear shaped. Those that do not will be in for rather a rude awakening.

To try to change from a dependence of the car virtually overnight to walking or using just a bicycle is not going to be easy for those that have really know no other way but the car and who are not prepared for it on a mental and physical level; and that is just on a personal transportation level.

It could all be a slow process and people may have time preparing for it and getting used to it or it could be a case of the powers-that-be turning the tap off overnight, and in a way I believe it will be a mix of the two.

Initially, my guess is that the tap will be gradually turned off, so to speak, by increments in that fuel prices will rise more and more on an almost daily basis until gas becomes too expensive to afford for most ordinary people, this is then, as the final act, I believe, going to be followed by the tap being turned off entirely for all mere mortals.

Without having, obviously, a direct wire to the future and the oracle I suggest we prepare for the worst and that is end of gas or diesel for personal motorcar use overnight and hope for an easier transition to a no-fuel event.

© 2010

This is an extract from the book “The End of Oil” by this author. The book can be purchased on http://the-end-of-oil.blogspot.com/.

Recession is 'inevitable' as long as UK economy is dependent on oil

by Michael Smith (Veshengro)

First the UK's economy must break free of its dependence on oil in order to make a sustainable recovery from the current credit crunch.

This is the warning issued by University of Liverpool expert Simon Snowden, who said the world is heading for a "supply plateau".

Mr Snowden, who recently addressed the All-Party Parliamentary Group on Peak Oil and Gas, said that the accelerating cost of oil marks the approach of a peak in oil production, and that demand will soon outstrip supply to the extent where world economies will begin to fail.

The price of oil has, in the past 12 months, risen from just above $50 a barrel to a record of nearly $139 a barrel recently.

A recent report, however, from Goldman Sachs mentions that the possibility of $150 to $200 a barrel is increasingly likely in the next six to 24 months.

Mr Snowden said that, unnless we completely cut our dependence on oil, we could see years of almost non-existent growth for the UK economy. Any recovery will be short-lived and at ever lower levels.

He further stated that the cost of goods will rise even more sharply and the economy could stagnate into a recession for several years.

In order to overcome this dependence on oil we must invest – heavily – in alternative forms of energy and transport. Changing our economy in such a fundamental way, however, will take years, and therefore, in this sense, a recession is inevitable.

While this may be so it must be a definite requirement that the elderly and the poor, as well as the farming industry, be safeguarded and protected from fuel poverty.

In the United States we begin to see farmers to bring back draft animals for use in the fields as they can no longer afford to run their fuel-guzzling tractors and other machinery.

The great paradox is that the UK exports oil and gas and then imports it again rather than to keep the oil that we produce. This does not make sense. Someone said once, when I questioned him on this, that it would be too difficult to store the oil and especially the gas until needed. Why?

Is the truth not more like that the Treasury gets a nice sum from the export of British oil and gas and that that really is why we do not keep our own, home-grown, so to speak, oil and gas. It is much more beneficial for the Treasury and therefore the government's coffers to sell the oil and gas and then to have the petrochemical companies import oil and gas from elsewhere.

It has nothing to do with being difficult to store, I am sure. In the same way that we destroyed our coal mines in this country – thanks Mrs. Thatcher – and import cheap coal that is low grade and very high in sulfur content. British coal was and is high quality coal that burned well and with today's technology could be the world leader in clean coal power stations and such like. However, most of the collieries will be finished for ever as they cannot even be reopened because they were permitted to be flooded and the gas was allowed to build up in there.

© M Smith (Veshengro), June 2008

The Age of Peak Oil has arrived

It's time to batten down the hatches - the age of peak oil is upon us and we'd better take action fast. The price of oil will feed into just about everything you can imagine. Can you think of a single thing you use in your everyday life that is not in some way dependent on oil?

We may see some fluctuations in the price but the tendency will be for the price to push relentlessly upwards. The reason is that demand is outstripping supply by a few million barrels a day and the gap is getting wider. Global crude oil production peaked in 2005 - inventories are now being desperately wrung out and reserves drained to fill the gap. It's time to face the facts, we need to be far more resource efficient. Because oil is in some way embodied in just about everything, even if it's only transport, improving resource efficiency is essential to manage the impact of rising costs. But to be more resource efficient we need the entire workforce on board and that means more emphasis on training and motivation.

We've had oil shocks before and a look at how they developed will help to manage the coming storm and put it in context. The Shot in the Dark training DVD "It's Easy with Hindsight" helps to paint the picture. The DVD uses a compilation of 8 trigger videos to connect the audience to their dependence on natural resources using the examples of oil, forests and fish, including:

"From Dreams to Nightmares" 6 videos that trace the growth of the oil economy from the 1930's through the 1970's oil embargo to the inevitable decline as we hit 'Peak Oil'.

"Live 4,000 Years - Die in a Day" - a stunning five minute video that looks back on the destruction of the Great Redwoods and continuing world-wide deforestation.

"Where's the Catch?"
A short video on the fall and rise of the Alaskan salmon catch.

The videos have a core length of between 3 and 7 minutes to accommodate tight training schedules and each title can be used with or without the director's introductory comments.

Shot in the Dark director Alan Owen said: "The programmes use recently unearthed archive footage that show how naive and wasteful we have been. For example, we found in one early clip that showed at one time they used to think gasoline was a waste product and poured it in the river! What do we discard today that will mystify future generations? Plastics? Wood? Electronics? Training is more effective if you can engage the audience and make it an emotional experience - make it fun, make the audience smile and make them think.

These videos can be used to lighten the mood of training sessions, as much of the content is rich in unintentional humour, for example, one scientist in the 1930's - clearly very nervous of being in front of the camera - states that one day they will develop engines that can do 300 miles to the gallon! I wonder what happened to that aspiration? Comments like that stimulate audience discussion and help to break down barriers - so they are an essential tool for introducing resource efficiency workshops and awareness courses."

Shot in the Dark is a video production company specialising in the production of environmental training materials.

The DVD is available direct from Shot in the Dark via their website www.shotinthedark.co.uk or phone 01484 651111.