a report on oil: mid summer 2007

Back at the end of June, while mainstream media was off covering, let’s see what was the story de jour in late June? Ah yes, the launch of apple’s new iPhone. Back in June, while all the paid reporters were off testing out their brand new $500 cell phones, the price of a barrel of oil was once again on the rise. From Dawn.com,

LONDON, June 28: The New York oil price surged above $70 per barrel for the first time in ten months on Thursday, amid tight supplies in the US, the world's biggest consumer of energy…. New York's main oil futures contract, light sweet crude for delivery in August, soared by more than a dollar to $70.52 in electronic deals -- the highest level since August 28, 2006.

The same website went on to explain that the sudden surge in crude cost happened,

after the US Department of Energy (DoE) reported that American petrol stockpiles fell by 700,000 barrels to 202.6 million barrels in the week ending June 22. That surprised the market, as analysts had expected a gain of 1 million barrels.—AFP

So the professional fellas following oil were caught off guard and the cost of crude has been beyond the $70 a barrel mark for upwards of two week now with nary more than a peep out of the iMedia. In fact, on July 2, MSNBC ran an article on their front page entitled, “Have Pump Prices Peaked For the Summer?” That was just before our nation was about the celebrate the 4^th of July. Now I’m not going to go so far as to claim a special scheme in this case (we wouldn’t want to spook all those potential July 4th travelists would we?) Besides to speculate that the media didn’t cover $70 a barrel oil so that they would refrain from frightening Americans out of traveling for a holiday weekend would just lead to name calling. You’d call me a conspiracy theorist and I’d call you a coincidence theorist so let’s skip all that and get back to the matter at hand. Oil has risen to more than $70 a barrel and as it did so, MSNBC was saying,

‘If all goes well, pump prices may have peaked for the summer.’

Yeah! And then we all drove to the beach.

The article did get one part right saying,

This spring’s pump price spike drew widespread ire from American drivers. A survey conducted earlier this year, as the price of gasoline broke through $3 a gallon, found that more consumers were concerned about high gas prices than they were about terrorism or the state of overall economy…. But that concern has not put a crimp in consumption.

And yes MSNBC also covered the predicted increase in Independence Day driving,

Based on a national telephone survey, AAA estimated that about 41.1 million Americans will travel during the Fourth of July holiday week, up 0.8 percent from last year.

So all was well on the 4^th and here we are approaching the ides of July and still only the faintest hints of coverage concerning the rising cost of crude- $73.46 a barrel as a type.

Of course all of this was happening under the shadow of a report from the International Energy Agency (IEA) that said,

Despite four years of high oil prices, this report sees increasing market tightness beyond 2010, with OPEC spare capacity declining to minimal levels by 2012

The truth is, Salon.com has a wonderful article out about how peak oil is all over and yet dodged about in a recent commentary concerning the IEA and its most recent , um… thoughts. Andrew Leonard quoted this section from the IEA,

While there might be a temptation to extrapolate this trend, citing a peak in conventional oil output, a degree of caution is in order. Firstly, the concept of "conventional" oil changes with time, technology and economics. In the early 1970s, much offshore production was deemed unconventional, but this portion of global supply has since grown to account for 30 percent of the total.

OK so they want to redefine “oil” to avoid uttering the word “peak.” But there’s more,

Peak or plateau production is frequently taken as shorthand for impending resource exhaustion. While hydrocarbon resources are finite, nonetheless issues of access to reserves, prevailing investment regime and availability of upstream infrastructure and capital seem greater barriers to medium-term growth than limits to the resource base itself.

No, no, no they say. We’re not approaching peak oil, but we might be experiencing a few problems that could best be blamed on, well, something that resembles peak oil.

Of course we could invade a country in the area of the Earth with most of the remaining petroleum still to be extracted, but even doing that might not lead to quick and easy oil legislation that would strengthen our outlook on future supply. And some smart people are already calling us out.

Six Nobel Peace Prize laureates have released a statement in opposition to the proposed controversial Iraqi oil law, that some observers believe could go before Parliament as early as this week.

The laureates include Betty Williams, Mairead Maguire, Rigoberta Menchu, Jody Williams, Shirin Ebadi and Wangari Maathai.

The statement reads, in part, “The Iraqi oil law could benefit foreign oil companies at the expense of the Iraqi people, deny the Iraqi people economic security, create greater instability and move the country further away from peace.”

Then again peace has never been at the forefront of American foreign policy.

I pick on mainstream media but give credit where it’s due. The L.A. Times L.A. Times ran a story that said,

The International Energy Agency, energy advisor to 26 industrialized countries, cautioned that a crude crunch was on the way because world demand was rising faster than production.

But my favorite article of recent comes from Times of India which reported,

World oil prices fell on Monday after rebels in key energy producer Nigeria freed a three-year old British girl.

I am certainly glad she is free and safe but let me add that when the worldwide cost of oil rises and falls on the fate of one small child, it’s obvious that there is some else, something bigger going on than just tight markets and rising demand.

Instability has a cause. One of my main beefs with the media is that they often point out the effects but do little to relate them to the underlying cause. Immigration is a great example. With all the brouhaha lately I have been only amused. Personally I think the fairest solution would be to form a council with Native Americans from all the indigenous nations and send before them every man, woman and child in America to decide who gets to stay and who gets to go (finally some real settling of genocidal scores) but since that’s not likely to happen could we please, as a nation, talk about the underlying cause of rampant illegal immigration and stop bitching about what is, or is not, an expectable language to speak out in public?

Jeff Vail just published a wonderful piece over at the oil drum concerning the state of Mexico. Mexico is the number two supplier of oil to the U.S. just after Canada and only a bit above Saudi Arabia. Mexico’s ability to produce oil is in big trouble.

This in turn is already causing ripple effects throughout that nation but it could spell bad news for a nation already sending its citizens northward at a alarming rate. But this is not discussed in the media. We hear mostly about the xenophobes and the reactions to the xenophobes.

So why did I fail again to write about how I am making useful change in my life in response to all this craziness going on, if undiscussed, in the world as we approach peak oil? Why did I instead just banter about concerning what’s really going on in the world. Because I’m just generally annoyed and thought I would share and because it’s great therapy and because I thought you might like to play connect the dots.

It should be noted that I am about to get up out of this chair drive to the bike shop. I will be purchasing my new mode of transportation soon. This coming Monday marks the first day of my more local job and I will soon be trading in my internal combustion engine for a bicycle commute. So you see this bitching is a form of release before the real work of change begins; just so you don’t think I’m a total drag.

But if you’re interested in a run down of all above concerning what is not being discussed about the most important topic of our times, here’s the short list:

The iPhone is stupid.

Oil is, and has been, above $70 a barrel for two weeks.

Watch for a rise in the price of gas.

The IEA pretty much confirmed peak oil.

No one wants to say “peak.”

We probably peaked in May 2005.

Americans are still increasing oil consumption.

Trilby Lundberg sold her soul to Lee Raymond years ago.

Nobel Peace Prize laureates think the proposed Iraqi oil law sucks.

A three year old recently brought down the cost of crude.

Mexico is a major oil supplier to the US and is in big trouble.

And I will write something more useful sometime soon.

I promise.