It’s The Energy That Matters
October is national energy awareness month.
How we use energy in the next decade and beyond is what will define us as a nation.
For this reason we should discuss oil and the perspectives contained in two recent reports.
The Lloyds 360 Risk Assessment on sustainable energy security for 2010 cites quotes from sources including the IEA (Intl. Energy Agency), US DOE (Dept. of Energy), USEIA (Energy Info. Admin.) and the US Chamber of Commerce all discussing how important a prospect of peak oil is.
One researcher states that “A supply crunch appears likely around 2013 .. given recent price experience, a spike … of $200 per barrel is not infeasible.” The report continues on alternative fuels, shale, natural gas, alternative energies, climate change policy or lack thereof, interrupting investment decisions and is a recommended read. The report is aimed at business leaders and investors.
The US Joint Forces Command Joint Operating Environment (JOE) Report 2010 talks about threats our military will face in the coming decades.
“By 2030, demand is estimated to be nearly 50% greater than today. To meet that demand, even assuming more effective conservation measures, the world would need to add roughly the equivalent of Saudi Arabia’s current energy production every seven years.” (A country in this ball park is Iraq, who’s global output could be 12 MBD [mil. barrels/day]. by 2016)
The JOE report continues to say “By 2012, surplus oil production capacity could entirely disappear, as early as 2015, the shortfall in output could reach nearly 10 MBD”
We are the largest importer of oil standing to be the most sensitive to any shocks in supply. Domestic reserves, in the Gulf or Alaska will be a blip in supply and take 10 years to see any benefit. We use 20m. barrels in a day, domestic shale will not support this level of use, serving only an increase in costs.
This information should be on everyone’s radar, it should inform many decisions. There is too little talk of the price of our addiction to foreign oil, only that we are addicted.
Coming elections present opportunity for us to question our various candidates about their views on our energy future and how best to cushion the energy descent that an oil shock will bring.