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There's a provocative piece by George Monbiot in today's Guardian, where he talks about the failure of politicians to grasp the concept that there are either higher energy costs from renewable sources or no energy at all.

People are still thinking about alternative energy as alternative to oil, but what if there isn't one? Higher prices are the likely new reality.

Brands thinking about the future are going to have to realize that consumer's disposable income is going to decrease based on increased expenditures on items that we've previously taken for granted; fuel, energy and food. In addition, the knock on impact of this on costs of goods will be significant.

The prospect of decreasing standards of living looms large, but this appears to be the price we are paying for a reliance on an oil-based economy.

"Almost everyone seems to agree: governments now face a choice between saving the planet and saving the economy. As recession looms, the political pressure to abandon green policies intensifies. A report published yesterday by Ernst & Young suggests that the EU's puny carbon target will raise energy bills by 20% over the next 12 years. Last week the prime minister's advisers admitted to the Guardian that his renewable energy plans were "on the margins" of what people will tolerate.

But these fears are based on a false assumption: that there is a cheap alternative to a green economy. Last week New Scientist reported a survey of oil industry experts, which found that most of them believe global oil supplies will peak by 2010. If they are right, the game is up. A report published by the US department of energy in 2005 argued that unless the world begins a crash programme of replacements 10 or 20 years before oil peaks, a crisis "unlike any yet faced by modern industrial society" is unavoidable.

If the world is sliding into recession, it's partly because governments believed that they could choose between economy and ecology. The price of oil is so high and it hurts so much because there has been no serious effort to reduce our dependency."


Posted by Ed Cotton This graph from WTRG Economics, shows the history of crude oil prices since 1947 and shows our current situation in context.

The knock on impact of this in obviously considerable with most industries finding little place to to hide from the impact and effects.The significance of this cannot be under-estimated especially as forecasts suggest the price is unlikely to come down.

With the recent report from the OECD that food prices are also likely to stay high for at least 10 more years, shows that previously "cheap" essentials for life are fast becoming luxuries.




Posted by Ed Cotton The price of oil appears to be going through the roof and it’s clearly being driven by increased demand from China and India, but also by increasing global prosperity.

While few politicians appear ready to acknowledge the startling fact, many industry observers believe we are now over the “Peak Oil” threshold.

Quite simply, oil supplies aren’t limitless and we have just reached or are about to reach that peak.

While global warming is clearly a challenge, but Peak Oil could be bigger.

This is the opinion of Matthew Simmons, who incidentally isn’t a professor at some liberal arts college, or an activist on the frontlines for Greenpeace; instead, he’s a paid-up pinstripe-suit wearing investment banker to the oil industry.

Here’s his concluding slide from a recent presentation he gave.


A full copy of this deck and his other presentations can be found here.

Obviously, oil companies are trying to get the conversation started, but are they the right people to be doing it and are they doing it the right way?



Posted by Ed Cotton The nature of the global energy challenge is hard to grasp because it's hard to relate to see through the measurement jargon and understand the scale of the problem.

Thanks to some work by SRI International (Hewitt Crane and Ed Kinderman to distill annual global oil production into a new unit of measurement they call a CMO (cubic mile of oil) and the design skills of Bryan Christie, the scale of the challenge to replace our oil resources can be seen in one stunning visual.

The number of alternatives required each year is the black number in the graphic. Obviously certain assumptions have had to be made and there's a possibility of technological innovation improving efficiencies, but still, it's a huge challenge.

Via The Oil Drum




Posted by Ed Cotton