George Monbiot writes to the King of Saudi Arabia:
King Abdaullah of Saudi Arabia
Your Majesty,
In common with the leaders of most western nations, our prime minister is urging you to increase your production of oil. I am writing to ask you to ignore him. Like the other leaders he is delusional, and is no longer competent to make his own decisions.
You and I know that there are several reasons for the high price of oil. Low prices at the beginning of this decade discouraged oil companies from investing in future capacity. There is a global shortage of skilled labour, steel and equipment. The weak dollar means that the price of oil is higher than it would have been if denominated in another currency. While your government says that financial speculation is an important factor, the Bank of England says it is not, so I don’t know what to believe. The major oil producers have also become major consumers; in some cases their exports are falling even as their production has risen, because they are consuming more of their own output.
But what you know and I do not is the extent to which the price of oil might reflect an absolute shortage of global reserves. You and your advisers are perhaps the only people who know the answer to this question. Your published reserves are, of course, a political artefact unconnected to geological reality. The production quotas assigned to its members by Opec, the oil exporters’ cartel, reflect the size of their stated reserves, which means that you have an incentive to exaggerate them. How else could we explain the fact that, despite two decades of furious pumping, your kingdom posts the same reserves as it did in 1988?
You say that you are saving your oil for the benefit of future generations. If this is true, it is a rational economic decision: oil in the ground looks like a better investment than money in the bank. But, reluctant as I am to question your Majesty’s word, I must remind you that some oil analysts are now wondering whether this prudence is a convenient fiction. Are you restricting supply because you want to conserve stocks and keep the price high, or are you unable to raise production because your fabled spare capacity does not in fact exist?
I do not expect an answer to this question. I know that the true state of your reserves is a secret so closely guarded that oil analysts now resort to using spy satellites to try to estimate the speed of subsidence of the ground above your oil fields, as they have no other means of guessing how fast your reserves are running down.
What I know, and you may not, is that the high price of oil is currently the only factor implementing British government policy. The government claims that it is seeking to reduce carbon dioxide emissions, by encouraging people to use less fossil fuel. Now, for the first time in years, its wish has come true: people are driving and flying less. The AA reports that about a fifth of drivers are buying less fuel. A new study by the Worldwide Fund for Nature shows that businesses are encouraging their executives to use video conferences instead of flying. One of the most fuel-intensive industries of all, business-only air travel, has collapsed altogether.
In other words, your restrictions on supply — voluntary or otherwise — are helping the government to meet its carbon targets. So how does it respond? By angrily demanding that you remove them so that we can keep driving and flying as much as we did before.
James Kunstler rocks the Washington Post :
Everywhere I go these days, talking about the global energy predicament on the college lecture circuit or at environmental conferences, I hear an increasingly shrill cry for “solutions.” This is just another symptom of the delusional thinking that now grips the nation, especially among the educated and well-intentioned.
I say this because I detect in this strident plea the desperate wish to keep our “Happy Motoring” utopia running by means other than oil and its byproducts. But the truth is that no combination of solar, wind and nuclear power, ethanol, biodiesel, tar sands and used French-fry oil will allow us to power Wal-Mart, Disney World and the interstate highway system — or even a fraction of these things — in the future. We have to make other arrangements.
The public, and especially the mainstream media, misunderstands the “peak oil” story. It’s not about running out of oil. It’s about the instabilities that will shake the complex systems of daily life as soon as the global demand for oil exceeds the global supply. These systems can be listed concisely:
The way we produce food
The way we conduct commerce and trade
The way we travel
The way we occupy the land
The way we acquire and spend capital
And there are others: governance, health care, education and more.
As the world passes the all-time oil production high and watches as the price of a barrel of oil busts another record, as it did last week, these systems will run into trouble. Instability in one sector will bleed into another. Shocks to the oil markets will hurt trucking, which will slow commerce and food distribution, manufacturing and the tourist industry in a chain of cascading effects. Problems in finance will squeeze any enterprise that requires capital, including oil exploration and production, as well as government spending. These systems are all interrelated. They all face a crisis. What’s more, the stress induced by the failure of these systems will only increase the wishful thinking across our nation.