Yang Xian, President of Shandong Kerui Group Holding Corporation
“Politics and economic activity in Peru is better than in other Latin American countries such Continue Reading
Review November 1, 2010
It was a rather quiet week with oil hovering around $82 a barrel and closing on Friday at $81.43. Large US crude inventories continue to keep a lid on prices as does the lack of much positive news on the economy. The oil markets continue to move along with the US dollar which is currently mired in the debate over whether another round of quantitative easing (QE2) by the Federal Reserve would lead to faster economic growth. Traders are concerned that QE2 could lead to a still weaker dollar and higher oil prices unrelated to the fundamentals of supply and demand. During the week the US dollar fell to a 15 year low against the yen.
France’s oil port strike was called off on Friday so that refining and oil product distribution should be back to normal in a week or two. At one point the strike had forced the shutdown of one of Switzerland’s refineries which receives its crude by pipeline from France.
The Impact of Peak Oil: An Alternative View
At the ASPO Conference in early October 2007, Robert Hirsch presented his view of the impact of peak oil on the economy and society. While most of his assertions are readily supportable, the historical record is nevertheless perhaps more nuanced and deserves consideration in thinking about future events.
To begin with, there have been to date arguably two peak oil recessions. The first of these, the period of the Iran-Iraq war after 1979, was artificial. Saudi Arabia decided to defend a high oil price with production restrictions, despite the fact that production capacity was largely adequate to meet global needs. As a consequence, oil production fell in a pattern similar to that which we might expect after peak oil. By contrast, the oil shock of 2008 was arguably the first, true global peak oil recession. Unlike the shocks of the 1970’s, there were no supply disruptions. The world simply ran out of spare capacity. While the oil supply did not peak in the accounting sense, for the first time, it was structurally unable to meet growing global demand. These two periods, then, tell us something about the future course of oil shocks resulting from peak oil.
The Peak Oil Debate is Over – Dr. James Schlesinger
Can the political order face up to the challenge? There is no reason for optimism.
We are likely to see pseudo-solutions, misleading alternatives and sheer sloganeering: “energy independence,” “getting off foreign oil” and the like. All of that sheer sloganeering we have seen to this point.
The political order (which abhors political risk) tends to rely on the Biblical prescription, “Sufficient unto the day is the evil thereof.”
Electrification and Expansion of Railroads as a Response to Peak Oil, By Alan S. Drake
One of the quickest and most effective responses to the realities of a post-Peak Oil economy is to electrify and expand the main-line railroads (about 35,000 miles in as little as 6 years) and later the busy branch lines (another 35,000 miles). The railroads burn slightly less than 300,000 b/d and inter-city trucking uses about 2 million b/d. Inter-city freight includes some of the most essential uses of oil today, such as delivering food and a variety of critical materials.
Replacing 300,000 b/d with electricity is good. Replacing 2 million b/day is significant. Creating a transportation system that can quickly, reliably and efficiently transport food, critical materials and people without oil is a vital national security concern.
Hannes Loacker, analyst at Raiffeisen Zentralbank Oesterreich AG
“China’s demand for oil remains strong and the rate hike is not of a magnitude Continue Reading