With 10 billion [euros], we could build 10,000MW offshore windfarms, delivering electricity for 7.5 million European households," said Jan Vande Putte of Greenpeace International.This is essentially where I am on this - fusion power has some real potential, but frankly, unless we're willing to get behind fusion the way we got behind fission (i.e., another Manhattan Project) we'll just piss money away that could be far better used in the here and now.
In other news, a US think-tank has war-gamed the possibility of serious oil shocks as a result of terrorism, and it ain't pretty. Oil peaks at $161/barrel, and gasoline sells for $5 a gallon. What's kind of funny, though, is that this nightmare scenario corresponds roughly to what Europeans spend on gasoline right now. This is another reason why I'm skeptical about the "Apocalypse Now" side of the Peak Oil community - there are places in the world that already deal with much, much higher energy costs than the US currently does.
Of course, the possibility of a catastrophic decline in oil production does tighten the sphincter a bit: Eric Sprott (apparently, an investment analyst) is publicly musing about annual oil production declines on the order of 8% per year. That translates to oil production declining by half in under a decade. If you buy this analysis, and also accept a near-Peak scenario, then we could be in a lot of trouble. If the global oil market is tens of millions of barrels short by 2010, we're simply screwed. You can get a better idea of Sprott's oil depletion numbers with this PDF, which has a lot of food for thought:
To overcome todays decline rates means that we have to find over 3 million barrels per day more of new oil than we did 10 years ago. Based on recent evidence, that just aint happening. Furthermore, 10 years ago it was known that OPEC could increase production by 10 million barrels per day over the next decade, and Russia by 3 million. (Thats how we got from 71 million barrels per day to 84 million.) The rest of the world (non-OPEC/Russia) has merely flatlined. If OPEC and Russia flatline today, then global oil production is sure to go down.Something to remember about the Tar Sands: Oil production from Athabasca is entirely dependent on cheap natural gas - even if we can ramp up volume production of tar sands oil (something I think is unlikely), if NG is scarce and expensive we still end up with expensive gas. Meanwhile, ethanol and other biofuels are falling in price.
As a side note, the decline rates being experienced in the natural gas industry are even more onerous. First Energy revealed that Canadian natural gas production is expected to rise by a measly 0.1% this year, even though exploration and development costs are up 25%. So 25% more money has to be spent in order to find 0.1% more natural gas. As one can see, the supply side of the natural gas market is having problems of its own.
The Sprott Paper is actually terrifying, making it an excellent complement to Matt Simmons' book about impending Saudi decline. Simmons, in case you've forgotten, has argued that Saudi decline, when it comes, will be fast and dramatic as a result of the extraction methods the Saudis have used. Sprott backs Simmons up, with info from the North Sea:
North Sea oil production is now falling off a cliff. In a report released this week, it was revealed that Britain had the steepest decline in oil production of any oil-producing nation last year, falling by 10% or 230,000 barrels per day. Norway (the other major North Sea oil producer) in the first four months of the year saw its oil production similarly fall 10% compared to last year. Even more disturbingly, the month of May alone saw a drop of 40,000 barrels per day versus April. If such a month-over-month rate of decline continues then Norway will lose at least 400,000 barrels per day of production this year alone. The heyday of North Sea oil production is clearly a thing of the past. It is worth noting that at its peak in 1999, the North Sea accounted for 9% of world oil production.Doing the math there, the combined UK/Norway decline will be almost 700,000 barrels this year - and that's if the UK holds production to last years levels, and doesn't decline further. Not too long ago, I derided James Howard Kunstler for portraying Peak Oil as an apocalyptic event. I stand by most of my criticisms of Kunstler, but it looks more and more like Peak Oil is unlikely to be the "soft landing" I have said was possible. If we'd taken Peak Oil seriously when warnings first started (roughly 1998) we might have avoided ourselves a lot of pain in the future - but jumping at the first guy to say "Boo!" would have been irresponsible, too. In any case, I'd get ready for more bicycling and walking in our futures.