Fossil Fuels : The Crisis Facing Obama

Cartoon by Married to the Sea.

"...The challenge just ahead is going to be the greatest since the Republic was founded. It will dwarf the challenges of the War Between the States, the Great Depression and World War II and will test your leadership to the utmost."

Tom Whipple

Peak oil and the need to move quickly.
By Roger Baker / The Rag Blog / November 9, 2008

See 'The Peak Oil Crisis: Memorandum for the President-Elect' by Tom Whipple, Below.

Tom Whipple, as I have noted previously, was a top CIA analyst until he retired. He now writes about energy issues; he fully understands the implications of peak oil and, IMO, is right on target in his comments below. If you want lots of numbers and details to fill the picture, go to The Oil Drum" or "Energy Bulletin".

It is worthy of note that the International Energy Agency, which advises European governments on energy policy, is just releasing a new report which warns that the world must shift away from fossil fuels as rapidly as possible to avoid crisis.

The IEA report is in executive summary form here.

The Peak Oil Crisis: Memorandum for the President-Elect
by Tom Whipple / November 6, 2008

The way things are shaping up, in less than three months you will be in charge of solving the direst set of crises since the ones faced by Lincoln back in 1861.

In every corner of the world economies are coming unglued. Our major financial institutions are approaching insolvency; unemployment is rising; public confidence in nearly every institution is collapsing; investments and savings are tanking; and to make matters worse, these forces seem to be simultaneously engulfing all the other nations of the world. There clearly are big changes just ahead and probably not for the better - at least not right away.

In sorting through the morass you soon will confront the old conundrum of the urgent vs. the important. From all directions crises are going to come at you. There are wars to settle; frozen finances and plunging markets; shortages and world adversaries seeking advantages. The list of the extremely urgent can only grow and grow for the world has become a populous, complex and interconnected place.

Beyond the obviously urgent, however, come the truly important - the problems that cannot be muddled through or solved quickly with borrowed money. Global warming and methane burps, the social security/Medicare shortfall, evaporation of retirement savings, depletion of easy-to-exploit oil deposits and perhaps a life threatening pandemic or two are examples of the truly important.

Right at the top of the truly important list, and more urgent than you probably realize, is to start the transition of the U.S. economy from fossil fuels - oil, coal, and natural gas - to renewable forms of energy as quickly as possible. If this does not start happening soon, then much of the U.S. and world economy is likely to start grinding to a halt well within the eight years you would like to remain in office. Moreover, if we rush to burn off all the remaining fossil fuel, primarily coal, in the name of economic recovery and growth, the world is likely to end up in a couple of centuries - and here opinions differ - anywhere from an unpleasant place to live to being nearly devoid of the higher forms of life.

We have heard all sorts of talk about energy independence in recent months usually coupled with calls for more domestic drilling, "clean-coal" or more ethanol. Such talk is meaningless since we are almost certain to become energy independent in the next decade or so simply because we won't be receiving most of the 12 million barrels of crude and oil products a day we are currently importing. They just won't be for sale, at least not to us.

There clearly has to be some sort of powerful incentive to get your administration, the Congress and the rest of the world's governments moving more quickly on the transition to a post fossil fuels world. At the minute, the only incentive on the horizon that seems able to get everybody's attention is high gasoline prices and actual shortages. Earlier this year we were getting close to taking action when oil was pushing $150 a barrel and the campaigns could talk of little else. However the perturbations of the financial crisis intervened and gasoline went back down to last year's prices.

Nothing stands still these days so by the time you are inaugurated it is a good bet that the OPEC cartel will have managed to cut production enough to start driving prices upwards again, perhaps not to $150, but perhaps enough to get people's attention and raise fears of inflationary pressures.

Sometime during your first year in office, your new Secretary of Energy is likely to come by and lay out the problem for you - world oil production is going down - perhaps faster than imagined; world oil exports are dropping even faster; prices are rising; and new domestic supplies will never make up the difference. The bottom line will be that the country is going to have to get along with steadily decreasing amounts of oil each year for the foreseeable future and that much will have to change if the economy is to continue to function.

It may take some time before you appreciate all the consequences of oil depletion. They will be everywhere. Transportation costs will go much higher. The GDP will slide. Jobs will disappear, and shortages will develop. At some point there will be a general agreement that looking for more fossil fuels or that a large scale effort to convert coal to liquid fuel is hopeless. A massive overhaul of the U.S. economy including transportation, lifestyles, jobs, agriculture, and industrial production will be necessary if we are going to continue running a civilization with declining quantities of fossil fuel.

This national epiphany will be the beginning of the great transition that will dominate the U.S. government and the world for many decades. New governmental organizations, policies, and procedures will be necessary to effect the transition for it will involve nearly every aspect of modern life. Do not be tempted by the notion that the markets alone can deal with this transition. A few minutes' reflection on what will be involved in forced reductions in the use of fossil fuels while still maintaining social order and some semblance of 20th century lifestyles will lead to the realization that this can only be accomplished by government coordination. We are no longer in the 19th century living on scattered self-sufficient farms. There are 300 million of us in the United States today, and we are totally, utterly, completely dependent on fossil fuels for our being.

The challenge just ahead is going to be the greatest since the Republic was founded. It will dwarf the challenges of the War Between the States, the Great Depression and World War II and will test your leadership to the utmost.

Source / Energy Bulletin

The Rag Blog