The Oil Drum: Peak Oil - the clear and present danger

[GliderGuider]

Very intense and timely stuff here. It's worth reading the whole thing.

Peak Oil - the clear and present danger

Global oil production (crude oil plus condensate) has been on a plateau / in decline for 7 years resulting in high energy prices that are feeding inflation, eroding family budgets and crippling the World economy. It is time for the international political community to awaken to the risks posed by Peak Oil. A British Government report published last week under a Freedom of Information Act (FOIA) request makes clear that civil servants working at the UK department of Energy and Climate Change (DECC) seem very aware of the risks posed by peak oil, and yet the British Government seems happy to continue to ignore warnings.

Last week The UK Guardian "newspaper" carried a story about an internal UK government report on peak oil that the government failed to make public and was eventually released under a Freedom of Information Act (FOIA) request made by French student Lionel Badal. The report, in form of a data and text rich Power Point presentation landed in my inbox (hat tip to Jerome) and I was quite amazed by the content. Slide 16 in particular caught my attention:



Of the 17 bullet points on the slide 16 have come to pass in the UK and in the neighbouring countries of Europe. Given that the research was conducted in 2007 and the report compiled in 2009 this conveys amazing insight by the DECC civil servants. Many may argue for different causes for the peak oil symptoms listed by DECC. But given the length of the list, near perfect correlation between forecast and events and the fact that global oil production has not increased for seven years, is it not safe to now draw the conclusion that peak oil lies at the heart of the UK and global economic woes?

1. Peak oil may threaten the global banking and financial system since the Ponzi scheme of growth based on credit expansion requires a growing stream of cheap energy to fuel the real economy. When the stream of cheap fuel dried up the real economy failed toppling the global fractional reserve banking system that lay at the heart of the Ponzi scheme. Fractional reserve banking has now been supplemented by Quantitative Easing as a means of creating money to drive consumption of finite reserves.

2. Peak oil will threaten pensions since these are based upon the excess net energy produced from high ERoEI energy sources (Energy Return on Energy Invested). As the ERoEI declines and the lifeblood of cheap net energy dries up it is inevitable that society's ability to care for those not in work (young, old and disfunctional) will be steadily eroded. This links to point 1 above via declining stock market valuations.

It's time to prepare for a major feco-ventilatory event...

On edit: adjusted the slide size.

[jwirr]

1. Well all of those results are already happening to a degree. I think

the world economic crisis should be added to the list.