Saturday, January 13, 2007

The Truth About Oil

Miks Schaefer at the Energy and Capital site has a 3 part series, titled "The Truth About Oil," underway.

The Truth About Oil - Part 1.

Key Takeaway:
You see, petroleum isn't just at your local Gas n' Go station. It's found in virtually every product that you buy, own and use. Be it your shoes, your Starbucks coffee cup, or the computer on which you are reading these very words.

And I'm not just talking about transportation from the factory to the stores where goods like these are purchased and consumed. I'm talking about the petroleum used in making the product itself and, more importantly, the petroleum needed for the technological breakthroughs that made these products a possibility.

Chew on these facts:

To construct the average car, approximately 27 to 42 barrels of oil, or 1,100 to 1,700 gallons, will be consumed.

Making average desktop computer requires more than 10 times its weight in fossil fuels.

Every calorie of food eaten in the U.S. requires roughly 10 calories of fossil fuels.

You see, we simply can't have computers, silicone, wire coverings, outlets, artificial limbs and electron microscopes without oil.

Fact is, whether you want to believe it or not, oil makes the world go ‘round.

The Truth About Oil - Part 2

Key Takeaway:

Assuming, for simplicity's sake, that the world reached its peak oil production back in 2005, that would mean that by 2025 there would be as much oil produced as there was in 1985. Fine, there was a lot of oil for the world in 1985. Only there's a slight hitch.

By 2025, the world's demand for oil is going to be 60% greater than it is today, while production capacity is thrown back to 1985 levels. This is due to the world's rapidly growing population and increasing industrialization. China's annual oil consumption growth rate of 7.5% and India's of 5.5% are both expected to take a quantum leap over the next decade.

He also speaks to OPEC's "cooking the books" strategy of the late 80s. The graphs alone say volumes. The fact that Kuwait's duplicity was revealed last year is even scarier. What then about the rest of OPEC?

Folks, I am sure I am sounding like a one-note Sally here, but unless we begin planning now for a future of low, or no, economic growth, we are all going to find ourselves in a world of hurt.

I hope the aldermanic candidates are paying attention. In case they aren't, and in view or our current Alderman's aspirations to greatness, here's the link to the Senate Committee on Energy and Natural Resources hearing on “The Geopolitics of Oil.” The hearing was held January 10, 2007. The Senate, at least, is beginning the process of educating itself. I just hope they don't conclude that we need to take over ME oilfields.

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