Heads in the Sand

I was driving to work this morning listening to MPR and the Marketplace segment featured an interview with a director from the NGO Global Witness that promoted their new report “Heads in the Sand” talking about the coming global oil supply crunch.   “Hey!” I thought to myself, “oil prices have plummeted and gas is cheap again.  What in the hell is this guy talking about?”  Well, not really, but it sounds good and is probably reflective of the thinking (what there is of it) of the American public.

While not coming right out and stating that the global oil supply is finite and that we’re moving into the “lower quality and harder to extract” part of the inventory, the report is pretty stark in what it does lay out:

Governments have not taken on board the four underlying oil production factors which clearly show there is a problem.  Heads in the Sand outlines these factors – declining output, declining discoveries, increasing demand and insufficient projects in the pipeline – which clearly show that the world is facing an imminent oil supply crunch.  Some of these factors have been apparent for many years. [1]

Governments and multi-lateral agencies have failed to recognise the imminence and scale of the global oil supply crunch, and most of them remain completely unprepared for its consequences. The report calls for governments to officially acknowledge the crunch and to shift urgently into safe sustainable energy alternatives.

“The world’s governments have been asleep at the wheel. Their collective failure to recognise the imminent end of the oil age means we have lost a decade in which action could have been taken to develop alternatives and avert the worst outcomes of a dramatic drop off in the supply of oil…”

As the gentleman on the radio pointed out this morning, the $147/barrel oil price we saw in 2008 was possible taster of things to come.   We still had some wiggle room in supply then.  What will happen in the future when we are all trying to bid for oil output that only covers 90% of global demand, or 50%?

I’ve taken a necessary break from this blog to focus on other things (work, family, etc) and to recharge my blogging enthusiasm.  No promises on how often I’ll be posting in the future, but please know that this blog is not dead.  There’s too many signs popping up about what the future may bring, and most of it ain’t pretty.

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3 Responses to Heads in the Sand

  1. knutty knitter says:

    I still have you on my list :) My own blog is suffering at present. Nothing to say that hasn’t been said better by others :)

    viv in nz

  2. Matt says:

    Just read today on American Energy Crisis that oil imports declined 8% last year and around 9% this year.

    Another place mentioned that by 2012 Mexico is going to start importing oil, so what happens to the 600 million barrels a year they export to us now…

    Things are happening but aren’t being talked about because the economy is taking all the news time. It will be a shock to most when it happens.

  3. mthomas says:

    the other day I came across a really good story on gold and the dollar considering the Federal Reserve’s continued plans to debase our currency and to try to cure a debt problem with more debt: Gold Price Headed to $2,300 on Hyperinflation Risk?

    here’s an excerpt: “The gold price, and the price of other hard assets, is rising as more investors across the globe ask themselves how these deficits and debts will be resolved. Furthermore, new congressional initiative aimed at politicizing the Fed would give the Secretary of the Treasury a veto over Section 13(3) governing emergency action by the Federal Reserve – and effectively taking away the independence of the central bank. Setting aside discussion of the power that the Federal Reserve currently has, if politics enters the arena of monetary policy, then the U.S. dollar’s fate is sealed. Political leaders who reflexively seek political refuge in populist pork-barrel and loose fiscal policies during difficult economic times may soon have the same power – and ballot-box pressure – over monetary policy.”

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