Peak oil getting taken seriously?

Here's some news from the UK, from a while back:

But documents obtained under the FoI Act seen by the Observer show that a "peak oil workshop" brought together staff from the DECC, the Bank of England and Ministry of Defence among others to discuss the issue.

A ministry note of that summit warned that "[Government] public lines on peak oil are 'not quite right'. They need to take account of climate change and put more emphasis on reducing demand and also the fact that peak oil may increase volatility in the market."

And here's something more recent from Germany:

The study is a product of the Future Analysis department of the Bundeswehr Transformation Center, a think tank tasked with fixing a direction for the German military. The team of authors, led by Lieutenant Colonel Thomas Will, uses sometimes-dramatic language to depict the consequences of an irreversible depletion of raw materials. It warns of shifts in the global balance of power, of the formation of new relationships based on interdependency, of a decline in importance of the western industrial nations, of the "total collapse of the markets" and of serious political and economic crises.

The study, whose authenticity was confirmed to SPIEGEL ONLINE by sources in government circles, was not meant for publication. The document is said to be in draft stage and to consist solely of scientific opinion, which has not yet been edited by the Defense Ministry and other government bodies.

Ah yes, something that consists "solely" of scientific opinion, without being filtered through the Ministry first. How terrible. The actual conclusions of the report aren't terribly surprising, and indeed are the kind of thing we've been expecting for years. For example:

Politics in place of the market: The Bundeswehr Transformation Center expects that a supply crisis would roll back the liberalization of the energy market. "The proportion of oil traded on the global, freely accessible oil market will diminish as more oil is traded through bi-national contracts," the study states. In the long run, the study goes on, the global oil market, will only be able to follow the laws of the free market in a restricted way. "Bilateral, conditioned supply agreements and privileged partnerships, such as those seen prior to the oil crises of the 1970s, will once again come to the fore."

Market failures: The authors paint a bleak picture of the consequences resulting from a shortage of petroleum. As the transportation of goods depends on crude oil, international trade could be subject to colossal tax hikes. "Shortages in the supply of vital goods could arise" as a result, for example in food supplies. Oil is used directly or indirectly in the production of 95 percent of all industrial goods. Price shocks could therefore be seen in almost any industry and throughout all stages of the industrial supply chain. "In the medium term the global economic system and every market-oriented national economy would collapse."

Relapse into planned economy: Since virtually all economic sectors rely heavily on oil, peak oil could lead to a "partial or complete failure of markets," says the study. "A conceivable alternative would be government rationing and the allocation of important goods or the setting of production schedules and other short-term coercive measures to replace market-based mechanisms in times of crisis."

The return to pre-eminence of politics, as opposed to the domination of market mechanisms, is something I've written about before.

Of course, this presumes that you think of oil as a "market" good to start with, which is questionable given that America's fought at least two wars to keep the flow of oil uninterrupted.

Interesting that both stories give the impression that governments are discussing this all quite seriously, but don't want to go public with it because it would freak the norms.

While we're discussing it, what if peak coal arrives synchronous with peak oil? Are totally effed?

Boy, if that turns out to be true a whole lot of Ontario Progressive Conservatives are going to owe Dalton McGuinty an apology over the caterwauling that put us through when he started migrating away from coal.