The Oil Drum: Europe — Rising North Sea oil production was a significant factor in keeping oil prices under control in the 1970s, 80s and 90s. Production peaked at 6.4 million barrels per day in 2000 and since then, declining North Sea Oil production is one significant reason that oil prices are now rising exponentially. …

There are many economists involved in running UK and European government agencies. Classical economics thinking is that high price will stimulate production and reduce consumption providing an amiable equilibrium between supply and demand.

In natural resource exploitation this rule works during the exploration and production build up where high price may stimulate fruitful exploration effort and new field development projects. However, once past peak, these rules break down and do not apply. It seems there are no economists around that understand this simple point. Once a resource is gone, used up, no amount of money in the world will bring it back. Economists who advise that production will somehow do a U-turn as prices rise are doing untold harm. This false hope, optimistic message grasped by politicians, is blocking the action required to mitigate for peak oil. This is another reason oil now costs over $130 per barrel. Vigorous expansion of all viable alternative energy sources may reduce demand for oil and that will bring down the oil price.

High price may slow the decline of the North Sea a bit but it cannot invent fields to be discovered or alter the rules of reservoir physics that dictate decline. Since high price will not stimulate much new production in mature provinces like the North Sea the only route available is demand destruction. The oil price will stop rising when gasoline gets too expensive and we stop using it.

With production running at 86 million barrels per day, that means we are consuming 31 billion barrels of oil every year. It is a sobering thought that by the time the Sun sets upon the whole of the North Sea, it will have produced enough oil to fuel planet Earth for just 2 years. To keep the oil party going we need to discover a “new North Sea” every two years and the last time we managed that rate of discovery was in the late 1980s, 20 years ago. We have been living off savings since then, and the bank balance is running down. It is not possible to get an oil overdraft or to create an energy instrument to magic oil and energy out of nothing. There is no choice other than to reduce our oil consumption and it is much better that we do this in a controlled way than to let high energy prices and inflation rip through our economies - which is exactly what is happening now. (06/08/08)
more…

John Fitzgerald Kennedy
speaking in 1963: Professor Woodrow Wilson
once said that every man sent out from a university should be a man of
his nation as well as a man of his time, and I am confident that the
men and women who carry the honor of graduating from this institution
will continue to give from their lives, from their talents, a high
measure of public service and public support.

“There
are few earthly things more beautiful than a university,” wrote John
Masefield in his tribute to English universities–and his words are
equally true today. He did not refer to spires and towers, to campus
greens and ivied walls. He admired the splendid beauty of the
university, he said, because it was “a place where those who hate
ignorance may strive to know, where those who perceive truth may strive
to make others see.”

I have, therefore, chosen this
time and this place to discuss a topic on which ignorance too often
abounds and the truth is too rarely perceived–yet it is the most
important topic on earth: world peace.

What kind of
peace do I mean? What kind of peace do we seek? Not a Pax Americana
enforced on the world by American weapons of war. Not the peace of the
grave or the security of the slave. I am talking about genuine peace,
the kind of peace that makes life on earth worth living, the kind that
enables men and nations to grow and to hope and to build a better life
for their children–not merely peace for Americans but peace for all
men and women–not merely peace in our time but peace for all time.
…

First: Let us examine our attitude toward peace
itself. Too many of us think it is impossible. Too many think it
unreal. But that is a dangerous, defeatist belief. It leads to the
conclusion that war is inevitable–that mankind is doomed–that we are
gripped by forces we cannot control.

We need not
accept that view. Our problems are manmade–therefore, they can be
solved by man. And man can be as big as he wants. No problem of human
destiny is beyond human beings. Man’s reason and spirit have often
solved the seemingly unsolvable–and we believe they can do it
again.

I am not referring to the absolute, infinite
concept of peace and good will of which some fantasies and fanatics
dream. I do not deny the value of hopes and dreams but we merely invite
discouragement and incredulity by making that our only and immediate
goal.

Let us focus instead on a more practical, more
attainable peace– based not on a sudden revolution in human nature but
on a gradual evolution in human institutions–on a series of concrete
actions and effective agreements which are in the interest of all
concerned. There is no single, simple key to this peace–no grand or
magic formula to be adopted by one or two powers. Genuine peace must be
the product of many nations, the sum of many acts. It must be dynamic,
not static, changing to meet the challenge of each new generation. For
peace is a process–a way of solving problems. (06/08/08)
more…

Timothy Wilken, MD writes: I originally posted a link to this article in December 2006. Dmitry Orlov’s new book of which this article forms the basis for a chapter was just published in May. The book is called Reinventing Collapse, and I just finished reading it this morning. 

It was difficult to read, not because the ideas were hard to understand, or that it was poorly written, but rather because I didn’t want to believe the message. Orlov was an eye witness to the political-economic collapse of the Soviet Union ~18 years ago. He states that the United States also faces a similar crisis — a complete political-economic collapse. In the linked article he writes:

“The subject of economic collapse is generally a sad one. But I am an
optimistic, cheerful sort of person, and I believe that, with a bit of
preparation, such events can be taken in stride. As you can probably
surmise, I am actually rather keen on observing economic collapses.
Perhaps when I am really old, all collapses will start looking the same
to me, but I am not at that point yet.

“And this next one certainly has me intrigued. From what I’ve seen
and read, it seems that there is a fair chance that the U.S. economy
will collapse sometime within the foreseeable future. It also would
seem that we won’t be particularly well-prepared for it. As things
stand, the U.S. economy is poised to perform something like a
disappearing act. And so I am eager to put my observations of the
Soviet collapse to good use.”

And, put them to use he does, both in his linked article and in his new book. As difficult as reading this book was, I am glad I read it, and plan to re-read it. I will be sending copies to friends and family. (06/08/08)
more…