The Oil Crunch; The ITPOES Report

The second report of the UK Industry Taskforce on Peak Oil & Energy Security was released last month.  Richard Branson, Virgin Group's founder is one of the members, and was in the news regarding the report.   People can download it from their website--http://peakoiltaskforce.net/.   I read through it, 60 pages, although I skimmed some of the appendices.  This might be the best recent analysis I've read, although I admit I've only skimmed the IEA's reports, which I think soft-pedal the situation.

The report has quite a bit of supporting information relative a projected oil production plateau of 92 million barrels per day.  This is significantly higher than the 89 million b/d I've seen claimed by Morgan Downey and others.   If true, this puts the point at which demand intersects with production (their "oil crunch") out a few years, rather than happening within the next year.  Same effect, but a bit further in the future.


One of the 2 expert opinions presented is that of Chris Skrebowski, founder of Peak Oil Consulting.  His role is to build the case for the coming supply crunch.  Much of his analysis is reasonable and thought-provoking.  I was interested to see that he claims "Recent work done in the US shows that high oil prices and recessions are linked." (page 21).  He goes on to say that when oil costs reach 4% of US GDP, a recession follows.  Unfortunately, he doesn't reference his source, although it sounds a lot like Jeff Rubin's Just How Big is Cleveland?  Further on (page 24) he talks about natural gas as the potential "wild card" replacement for oil.  Lots of interesting information, in particular regarding different nations' usage.  While I happen to agree that natural gas will be very important, he makes the same leap of logic the solar, wind, and nuclear power advocates do.  He doesn't explain how natural gas will power the millions of existing vehicles designed for petroleum fuels.  Keep an eye on my http://oil1859.org website where I'll work on that topic.  The first sentence his conclusion clearly links the recession to the 2008 oil price spike; "The recession caused by the credit crunch and the 2008 price spike has delayed the oil crunch by at least two years."

The second opinion, Robert Falkner's, is a very concise discussion of economic, political, and societal effects of higher oil prices.  Falkner is on the faculty of the London School of Economics and Political Science.  I think this really makes the case that energy sources are becoming a crucial strategic national security issue.  You get the sense that leaving prices to market forces is very, very dangerous.  This section is important because just saying there's going to be a peak, then decline, doesn't address the matter of the actual effects on civilization.

Following the experts' sections, the section on "Other points of view" is an excellent overview of major reports in the past year.  This isn't something I've seen anywhere else.  This report presents the main conclusions of the others without editorializing.  Then there's a section that presents the "Taskforce view" which comes down strongly on the side of a coming crisis with a need to prepare and adapt.

Their final section is a detailed set of recommendations that revolve around preparing alternate transportation and energy systems, anticipating cost increases, and providing a supportive climate for business investment in forward-looking technologies and industries.  Given that one of the taskforce leaders is Branson of Virgin Airline fame, the strong language in support of rails as an alternative to airlines is interesting.  Here and elsewhere they call for support for those in "fuel poverity".

The appendices give some pretty detailed discussion of the underlying methods of their analysis.  Good information if you're inclined to dig in.

With the caveat that this report estimates a higher worldwide production capacity than other estimates I trust, this is the best concise overview of the problem, discussion of effects, and practical recommendations for adaptation I've seen so far.  Read this if you read nothing else.  Well, read my article on the website, too...