Welcome to the age of diminishing returns

Monday, November 17, 2014

The peak oil theater



In classical antiquity, theatrical performances such as the "Atellana" farce were based on standardized plots and stock characters, identified by the masks they wore on stage. It was not so different than our present TV soaps and a good example of our tendency to interpret the world in narrative terms.


I am a little late for the talk at the peak oil conference. Fortunately, it seems that I didn't lose much: the speaker must have started just a few minutes before I arrived and I only missed the introduction by the chairman. So, I relax in my seat as the speaker goes on with his presentation.(*)

The first thing I note is his the way he is dressed; not the standard one in this conference. Most speakers, so far, have been physicists and they have a typical way of dressing: they look like physicists even when they wear a tie; and they usually don't. This speaker, instead, not only wears a tie, but even wears a double breasted suit (or so it seems to me - even if it is not a double-breasted suit, he wears it as if it were one). And it is not just the way he dresses, it is his whole posture and style. Everyone else at this peak oil conference has been speaking while standing up; showing slides, speaking without notes. Instead, he sits, shows no slides, and reads from a notebook he has placed on the table. If he is unlike the others in the way he appears, his talk is also totally unlike the others in this conference. Physicists tend to show data and numbers; graphs and tables; to the point of being boring. He doesn't. He is not showing data, or graphs, or tables. He is not even mentioning data. He is telling a story.

He takes us to a sort of tour of oil producers. Each country is described as if it were a character on the stage of the world's theater: the Americans, a little tough, but doing things right and successful in reaching energy independence by means of their advanced technologies; the Saudis, somewhat devious, but powerful with their large resources; the Russians, aggressive in their attempt of rebuilding their old empire. And the Europeans, well intentioned but hopelessly naive with their insistence on renewable energy. The story goes on as each character on stage interacts with the others. Will the Europeans succeed in getting rid of their dependence on Russian gas? Will the Americans be able to overtake the Saudis as the world leaders in oil production? What will the Saudis do to maintain their leadership?

Occasionally, data manage to appear in the narration; but when they do, the data are wrong. For instance, the speaker tells us that extracting one barrel of oil in Saudi Arabia costs as little as 2-3 dollars per barrel (yes, maybe thirty years ago). And he tells us that the Saudis just have to open the spigots of their wells to increase their production by 2, 3, or even 5 million barrels per day (yeah, sure.....). And some key concepts are never mentioned. No trace of peak oil, no hint of a depletion problem, and climate change seems to pertain to another conference, to be held on a different planet.

The talk winds up with the audience clearly perplexed. There starts the session of questions and answers and someone asks to the speaker what he thinks of peak oil. He answers first that he is not a geologist, but an economist; in this way confirming once more (if that ever was needed) that a man will never understand a concept if his salary depends on not understanding it. Then he adds that "they have been claiming for thirty years that peak oil was coming," and, if that wasn't banal enough, he mentions also the old quip by Zaki Yamani, "the stone age didn't end with the end of the stones." This is sufficient for stopping further significant questions. It is soon over and he rises up and leaves the hall while the conference continues with another speaker.

There is no experience so bad that you can't at least learn something from it. So, what can we learn from this one? For one thing, the speaker in the double breasted suit had an experience symmetric and opposite to experiences I had myself. Sometimes, when I tried to present the concept of peak oil to an audience of people wearing double-breasted suits, I had the distinct sensation that they were looking at me as if I were an alien from Betelgeuse-III, just landed in the parking lot with my flying saucer. When you say "clash of absolutes" you may well refer to this kind of experiences. But there is something badly wrong, here: we all read the newspapers, we all have access to the same data on the Internet. So, how can it be that people can come to such different interpretations and conclusions?

I have been mulling these considerations in my head and eventually it flashed on me: it is not a question of the data; it is a question of how people process them! And most people wearing double breasted suits think just the way most people think: they think in narrative terms, not in quantitative terms.

Think of our remote origins: prehistorical hunters and gatherers. What kind of skills did our ancestors need to survive? Well, one was the ability of making tools; from stone axes to fishing hooks. But, much more important than this was the stock of social skills needed to climb the ladder of the tribe's hierarchy; to become chiefs and shamans. That hasn't changed very much with the arrival of the social structure we call "civilization".  In the annals of the Sumerian civilization, we have records of the names of kings that go back to thousands of years ago, but no mention of the name of the person who invented the wheel during that period.  Even today, engineers are ruled by politicians, not the reverse.

So, the common way to interpret the world is in narrative terms, assigning roles to people as if they were actors playing their on-stage role. It is the theater of life, not unlike theater of the on-stage kind, not unlike the various forms of narrative that surround us: novels, movies, TV soaps and the like. It is typical of most people and it is especially strong in politics, where the various actors are classed in terms of a narrative vision of their role. For instance, Saddam Hussein was one of the characters supposed to play the role of the bad guy. Once he was cast in that role, there was no need of proof that he was accumulating weapons of mass destruction in order to start a war. He was evil, and that was enough. And there was no outrage when it was discovered that the weapons of mass destruction didn't exist. That didn't change Saddam Hussein's role as the evil guy of the narration.

Scientists, however, tend to think in a different way; especially those who study the fields known as "hard sciences." However, their way of reasoning is difficult to understand for most people. Just think of the common statement used to deny the human role in climate change, "scientists were worried about global cooling in the 1970". Independently of whether it is true or not (it is only marginally true), it illustrates the abyss of difference between the common way of interpreting reality and the scientific one. Scientists believe they should change their mind if new data contradict old interpretations. But that's not what heroes do in novels and films where, typically, a character starts with a given idea, fights for it throughout the story against all contrary evidence, and ultimately triumphs.

So, nobody would even remotely pay attention to what scientists say, were it not for the fact that they can occasionally come up with toys that people seem to like so much; from smart phones to nuclear warheads. But when they move out of their role as toy makers, their opinion loses importance in the debate. Even when you try to argue that a large majority of scientists (maybe 97%) agree that human generated climate change is a reality, you obtain nothing. Even a large majority among scientists is such an exceedingly tiny minority of the general population that it is not worth paying attention for most people (including politicians and decision makers).

In the end, telling stories is usually more successful than arguing using data and models. Indeed, after the conference, I was told that the economist in the double breasted suit is a very influential person and that people high up in the government often ask him for advice in energy matters. Evidently, he can tell a good story.


Not all good stories have a good ending, but good stories can always teach us something. So, what can we learn from this one?  One is that we have been doing everything wrong with the idea of using data in order to convince people of the reality of such things as peak oil and human caused climate change. Yes, it is possible to gently nudge people's beliefs in the right direction if we find ways to expose them for some time to the data and to their interpretation. But the kind of commitment we can obtain in this way is weak and ineffective. It is easily destroyed by even the most brutal and primitive propaganda methods: casting scientists as the bad guys of the story works wonders: as spin doctors themselves confess, "playing ugly pays". And once a narrative has made inroads in the mind of people, it is extremely difficult - in practice impossible - to dislodge it from there. Have you noticed how, in most narrative plots, bad guys remain bad guys throughout? It is as if they were the characters of an ancient Atellana farce, wearing the appropriate mask for the bad guy (or scientists wearing their nicknames of geeks or eggheads)

Another thing that we can learn from this story is that we are all humans and none of us think like machines or like robots. Scientists may be trained to reason in terms of data, but even for them it is difficult to do it all the time. Reasoning in narrative terms has accompanied our ancestors for hundreds of thousands of years. If it is still with us, it is because it has done us a good service over this long span of time. What counts is not that the world can be seen as an unfolding story, but what kind of story is unfolding. And there exists a different story of the world to be told, a story infinitely superior to the current brutal plot that tells us that all the problems we have are related to the bad guys of the day and that when we'll have bombed them to shreds everything will be fine again. This is the plot of second rate novels: it has little to do with real literature, the kind of literature that changes people for good, that changes the world for good. A better story of the world says that the world is not our enemy. The world is, rather, our partner (**): it can provide us with bountiful goods, but, as for a human partner, and as it is the stuff of so many stories, what we do to our partner comes back to us. If we hurt our partner, we will be hurt back and this is true in fiction as in real life. If we hurt the world surrounding us (or "Nature" or "the ecosystem", or whatever term you prefer) we will be hurt back, and this is already happening. This is the story we are living: we may be the good guys or the bad guys; it depends on us.






(*) This post is a factual report from a recent peak oil conference. I didn't name names or places, but the people who heard the talk I am describing will recognize it and the speaker.

(**) The concept of Nature as a partner to humankind can be found, for instance, in Charles Eisenstein's book "Sacred Economics"















Thursday, November 13, 2014

The Olduvai cliff: are the lights going out already?




Image from Li and Li, "international journal of remote sensing." h/t Colonel Cassad". The image shows the nighttime light pattern in Syria three years ago (a) and today (b).


Those among us who are diehard catastrophists surely remember the "Olduvai Scenario" proposed by Richard Duncan in 1989. The theory is a version of the peak oil idea, but focused on electricity production. It says that the gradual depletion of fossil fuels and mineral resources will gradually lead us back to the stone age ("Olduvai" from the area inhabited by our australopithecine ancestors). According to Duncan's update of his theory, the start of the precipitous decline ("Seneca style") might have started around 2012.


 
Clearly, we are not there, yet, and the new stone age still seems to be far away. But, there are some ominous symptoms that something bad this way comes. I stumbled into pictures of Syria now and three years ago, and they are impressive. The lights are going out there, already. And note that it was obvious from the beginning that the decline was to be accompanied by wars and internecine strife; just as what's happening in Syria. Surely, two pictures don't mean that the catastrophists are right; but surely they provide food for thought.








Saturday, November 8, 2014

Bringing the message about resource depletion to the European Parliament



With 24 languages deemed as "official," the European Union shares some characteristics with the ancient Babel Tower (above, the parliament building in Strasbourg). The Babel of languages is one of the problems associated with trying to pass messages to politicians, but not the most important one. Rather, the main problem seems to be a decisional mechanism which favors groupthink Here are some notes of a recent experience of mine at a hearing on energy security of the European Parliament in Brussels.


As I walk to the hearing on energy security in Europe, I am struck first of all by the size of the hall. The "Alcide De Gasperi" room in the palace of the European Parliament in Brussels was clearly built for impressing people, in addition to its function as a meeting room. One of its most remarkable features is the long row of windows of the interpreters' rooms. Since there are 24 official languages of the European Union, there have to be some 50 interpreters working in there. Then, I also notice how the screens for projecting one's slides are small and located high up, near the ceiling. This is not a place where you are supposed to support your statements with data and graphs. It is a place built for political debate.

As people collect in the hall, I can see that the atmosphere is rather formal, with several members of the European Parliament sitting in the audience. Most people are dressed in suits and many wear ties. On the podium, there are six invited speakers. And there we go; I immediately sense the mood of the conference: this is not a scientific meeting. None of the speakers seem to be an expert about fossil fuels, intended as markets, production, resources, reserves, and the like. Rather, they seem to be mainly concerned with strategic and political issues. The line that emerges from the presentations and from the reactions of the audience is clear: it is a highly confrontational attitude (to put it mildly) toward Russia, accused to be engaging in an economic war against Western Europe. The gist of what I hear is that the European Union must unite in defense; we must follow the example of the United States and get rid of our silly regulations and of the local resistance against drilling and nuclear plants. Europe can exploit its shale gas and oil resources (and also nuclear energy) and attain energy independence, as the United States did. It is "drill, drill, drill" all over.

This line, in various shades, is the position of four speakers out of six. The bias in favor of fossil fuels is shown also by the fact that the lady charged with defending renewables is given the last time slot of the hearing. The fossil oriented attitude seems to be shared by the majority of the audience. Not that it is not challenged by some of the MEPs in the room. One of them (I know him well, he has been a long time ASPO supporter) stands up and tells to one of the speakers: "it is not true that the United States has attained energy independence. You have to stop getting your data from newspapers!". He is right, (you can look at the data yourself). But it is an isolated reaction, and the overall debate remains based on the idea that the US has become energy independent or that, at least, it will soon become independent.

When it is my turn to speak, I tell a different story. I try to explain that the ultimate origin of the energy security problems in Europe is due to depletion, and that drilling more is not the solution. I keep the message as simple as possible; tailored for people who are not specialists in oil and gas. I show the price trends, I tell them something about energy return, and I make the point that renewable energy is not subjected to depletion. I sense that my talk is well received: the people in the audience listen to what I say, and they look up at my slides (but those screens are too high and too small, dammit!). I also get several questions and comments - mostly favorable ones. After the hearing is over, several people stop me to discuss further about what I said. As a talk, it was a reasonably successful one.

But, on the whole, I think I had a very modest impact, if any. As I noticed many times, it is extremely difficult to pass to decision makers messages which are perceived as out of the ordinary, as the message on resource depletion is. The problem has many facets and it has to do, mainly, with the way politicians think. According to my experience, politicians - especially high level ones - are very smart people. The problem is that they are swamped with information; just as most of us. So, in the great mass of data arriving, how do you decide what is the truth? If you are a scientist - or you are scientifically trained - you have ways to evaluate the data and filter out the bad ones. But politicians are not scientists, they are not scientifically trained, so they use a different method. They maintain a healthy dose of skepticism about everything they hear; they don't pay too much attention on data, and they tend to side with the interpretation that they perceive as the most compatible with the general opinion of the group they belong to.

There are reasons for this "groupthink" syndrome that, probably, affects politicians more than most of us. It is because then main tool in the political struggle, today, is the demonization of adversaries. So, a politician is very careful to avoid to be singled out from the crowd of colleagues and subjected to the standard demonizing treatment. For a politician, there is safety in crowds; a traditional strategy well known also by sheep and fish. In practice, you may see a politician as having a built in opinion detector in his head. He/she will sense the position of the majority and try to avoid straying too far away from it. In general, the way for a politician to obtain power is to occupy the center; to be seen as a moderate. That this is the way to success has been known for a long time; even rigorously modeled (in economics, it is known as the "Hotelling's law"). Scientists are sometimes contrarians, politicians almost never are. 

So, I think I can figure out the reaction of most of the MEPs to the hearing on energy security in Brussels. It was something like, "Well, that Italian guy who spoke about resource depletion might have a point about what the real problem is. I couldn't his slides so well, so high up near the ceiling, but he seemed to have some good data. But, on the other hand, the other speakers saw the problem differently. If most people in the parliament think that Russia is waging an economic war against us and that drilling more is a good idea, then there has to be something in it. For sure, I shouldn't take the risk of siding with a minority option."



Ugo Bardi teaches at the University of Florence, Italy. He is a member of the Club of Rome and the author of "Extracted, how the quest for mineral wealth is plundering the planet" (Chelsea Green 2014)








Thursday, November 6, 2014

The collapse of oil prices and energy security in Europe



This is a written version of the brief talk I gave at the hearing of the EU parliament on energy security in Brussels on Nov 5, 2014. It is not a transcription, but a shortened version that tries to maintain the substance of what I said. In the picture, you can see the audience and, on the TV screen, yours truly taking the picture.



Ladies and gentlemen, first of all, let me say that it is a pleasure and an honor to be addressing this distinguished audience today. I am here as a faculty member of the University of Florence and as a member of the Club of Rome, but let me state right away that what I will tell you are my own opinions, not necessarily those of the Club of Rome or of my university.

This said, let me note that we have been discussing so far with the gas crisis and the Ukrainian situation, but I have to alert you that there is another ongoing crisis - perhaps much more worrisome - that has to do with crude oil. This crisis is being generated by the rapid fall in oil prices during the past few weeks. I have to tell you that low oil prices are NOT a good thing for the reasons that I will try to explain. In particular, low oil prices make it impossible for many oil producers to produce at a profit and that could generate big problems for the world's economy, just as it already happened in 2008.

So, let me start with an overview of the long term trends of oil prices. Here it is, with data plotted from the BP site.




These data are corrected for inflation. You see strong oscillations, but also an evident trend of growth. Let's zoom in, to see the past thirty years or so:


These data are not corrected for inflation, but the correction is not large in this time range. Prices are growing, but they stabilized during the past 4-5 years at somewhere around US 100 $ per barrel. Note the fall during the past month or so. I plotted these data about one week ago, today we are at even lower prices, well under 80 dollars per barrel.

The question is: what generates these trends? Obviously, there are financial factors of all kinds that tend to create fluctuations. But, in the end, what determines prices is the interplay of demand and offer. If prices are too high, people can't afford to buy; that's what we call "demand destruction". If prices are too low, then it is offer that is destroyed. Simply, producers can't sell their products at a loss; not for a long time, at least. So there is a range of prices which are possible for oil: too high, and customers can't buy, too low, and companies can't sell. Indeed, if you look at historical prices, you see that when they went over something like 120 $/barrel (present dollars) the result was a subsequent recession and the collapse of the economy.

Ultimately, it is the cost of production that generates the lower price limit. Here, we get into the core of the problem. As you see from the price chart above, up to about the year 2000, there was no problem for producers to make a profit selling oil at around 20 dollars per barrel. Then something changed that caused the prices to rise up. That something has a name: it is depletion.

Depletion doesn't mean that we run out of oil. Absolutely not. There is still plenty of oil to extract in the world. Depletion means that we gradually consume our resources and - as you can imagine - we tend to extract and produce first the least expensive resources. So, as depletion gradually goes on, we are left with more expensive resources to extract. And, if extracting costs more, then the market prices must increase: as I said, nobody wants to sell at a loss. And here we have the problem. Below, you can see is a chart that shows the costs of production of oil for various regions of the world. (From an article by Hall and Murphy on The Oil Drum)



Of course, these data are to be taken with caution. But there are other, similar, estimates, including a 2012 report by Goldman and Sachs, where you can read that most recent developments need at least 120 $/barrel to be profitable. Here is a slide from that report.




So, you see that, with the present prices, a good 10% of the oil presently produced is produced at a loss. If prices were to go back to values considered "normal" just 10 years ago, around 40 $/barrel, then we would lose profitability for around half of the world's production. Production won't collapse overnight: a good fraction of the cost of production derives from the initial investment in an oil field. So, once the field has been developed, it keeps producing, even though the profits may not repay the investment. But, in the long run, nobody wants to invest in an enterprise at so high risks of loss. Eventually, production must go down: there will still be oil that could be, theoretically, extracted, but that we won't be able to afford to extract. This is the essence of the concept of depletion. 


The standard objection, at this point, is about technology. People say, "yes, but technology will lower costs of extraction and everything will be fine again". Well, I am afraid that it is not so simple. There are limits to what that technology can do. Let me show you something:



That object you see at the top of the image is a chunk of shale. It is the kind of rock out of which shale oil and shale gas can be extracted. But, as you can imagine, it is not easy. You can't pump oil out of shales; the oil is there, but it is locked into the rock. To extract it, you must break the rock down into small pieces; fracture it (this is where the term "fracking" comes from). And you see on the right an impression of the kind of equipment it takes. You can be sure that it doesn't come cheap. And that's not all: once you start fracking, you have to keep on fracking. The decline rate of a fracking well is very rapid; we are talking about something like a loss of 80% in three years. And that's expensive, too. Note, by the way, that we are speaking of the cost of production. The market price is another matter and it is perfectly possible for the industry to have to produce at a loss, if they were too enthusiastic about investing in these new resources. It is what's happening for shale gas in the US; too much enthusiasm on the part of investors has created a problem of overproduction and prices too low to repay the costs of extraction.

So, producing this kind of resources, the so called "new oil" is a complex and expensive task. Surely technology can help reduce costs, but think about that: how exactly can it reduce the energy that it takes to break a rock into fine dust? Are you going to hammer on it with a smartphone? Are you going to share a photo of it on Facebook? Are you going to run it through a 3D printer? The problem is that to break and mill a piece of rock takes energy and this energy has to come from somewhere.

Eventually, the fundamental point is that you have a balance between the energy invested and the energy returned. It takes energy to extract oil, we can say that it takes energy to produce energy. The ratio of the two energies is the "Net Energy Return" of the whole system, also known as EROI or EROEI (energy return of energy invested). Of course, you want this return to be as high as possible, but when you deal with nonrenewable resources, such as oil, the net energy return declines with time because of depletion. Let me show you some data.



As you see, the net energy return for crude oil (top left) declined from about 100 to around 10 over some 100 years (the value of 100 may be somewhat overestimated, but the trend remains the same). And with lower net energies, you get less and less useful energy from an oil well; as you can see in the image at the lower right. The situation is especially bad for the so called "new oil", shale oil, biofuels, tar sands, and others. It is expected: these kinds of oil (or anyway combustible liquids) are the most expensive ones and they are being extracted today because we are running out of the cheap kinds. No wonder that prices must increase if production has to continue at the levels we are used to. Then, when the market realizes that prices are too high to be affordable, there is the opposite effect; prices go down to tell producers to stop producing a resource which is too expensive to sell.

So, we have a problem. It is a problem that appears in the form of sudden price jumps; up and down, but which is leading us gradually to a situation in which we won't be able to produce as much oil as we are used to. The same is true for gas and I think that the present crisis in Europe, which is seen today mainly as a political one, ultimately has its origin in the gradual depletion of gas resources. We still have plenty of gas to produce, but it is becoming an expensive resource.  It is the same for coal, even though so far there we don't see shortages; for coal, troubles come more from emissions and climate change; and that's an even more serious problem than depletion. Coal may (perhaps) be considered abundant (or, at least, more abundant than other fossil resources) but it is not a solution to any problem.

In the end, we have problems that cannot be "solved" by trying to continue producing non renewable resources which in the long run are going to become too expensive. It is a physical problem, and cannot be solved by political or financial methods. The only possibility is to switch to resources which don't suffer of depletion. That is, to renewable resources.

At this point, we should discuss what is the energy return of renewables and compare it to that of fossils. This is a complex story and there is a lot of work being done on that. There are many uncertainties in the estimates, but I think it can be said that the "new renewables", that is mainly photovoltaics and wind, have energy returns for the production of electrical energy which is comparable to that of the production of the same kind of energy from oil and gas. Maybe renewables still can't match the return of fossils but, while the energy return of fossil keeps declining, the return of renewables is increasing because of economies of scale and technological improvements. So, we are going to reach a crossing point at some moment (maybe we have already reached it) and, even in terms of market prices, the cost of renewable electric power is today already comparable to that of electric power obtained with fossil fuels.

The problem is that our society was built around the availability of cheap fossil fuels. We can't simply switch to renewables such as photovoltaics, which can't produce, for instance, liquid fuels for transportation. So, we need a new infrastructure to accommodate the new technologies, and that will be awfully expensive to create. We'll have to try to do our best, but we cannot expect the energy transition - the "energiewende" - to be painless. On the other hand, if we don't prepare for it, it will be worse.

So, to return to the subject of this hearing, we were discussing energy security for Europe. I hope I provided some data for you that show how security is ultimately related to supply and that we are having big problems with the supply of fossil energy right now. The problem can only increase in the future because of the gradual depletion of fossil resources. So, we need to think in terms of supplies which are not affected by this problem. As a consequence, it is vital for Europe's energy security to invest in renewable energy. We shouldn't expect miracles from renewables, but they will be immensely helpful in the difficult times ahead.

Let me summarize the points I made in this talk:



Thank you very much for your attention and if you want to know more, you can look at my website "Resource Crisis". www.cassandralegacy.blogspot.com




Ugo Bardi teaches at the University of Florence, Italy. He is a member of the Club of Rome and the author of "Extracted, how the quest for mineral wealth is plundering the planet" (Chelsea Green 2014)








Tuesday, November 4, 2014

The Oil Crash: it is happening now!





James Schlesinger said once that humans have only two modes of operation: complacency and panic. This bimodal kind of functioning seems to be applied also to the oil market, where everything is judged on the base of a simple binary rule: high prices: bad; low prices: good. So, with oil prices falling rapidly during the past few days, the general attitude seems to be mostly of rejoicing. All worries about peak oil are being swept under the carpet and SUV owners seem to be happily expecting the fall of gas prices that will allow them to fill up their tanks on the cheap.

Unfortunately, the bimodal perception of the world makes people blind to the fact that nothing happens in isolation in the world. It is the basic law of complex systems: you can't do just one thing. If something changes in a complex system, it is because something else has made it change. And if something changes, then something else will have to change. Complex systems work in this way. And changes are unavoidable and not always for the good of those experiencing them.

That's true also for the crude oil producing system, which is not an isolated system. Changing some of its features reverberates all over the world. So, bringing down oil prices has an effect on other parameters. Look at this figure (from an article by Hall and Murphy on The Oil Drum)


Of course, these data are to be taken with some caution - they are only estimates. But there are other, similar, estimates, including a 2012 report by Goldman and Sachs where you can read that most recent developments need at least 120 $/barrel to be profitable. So, you see what is the problem? Prices under 80 $/barrel destroy the profitability of about 10% of the oil presently produced. If prices were to go back to values considered "normal" just 10 years ago, around 40 $/barrels, then we would lose around half of the world's production. Anyone saying "peak oil"? Well, yes, this is the mechanism that generates peak oil: an irreversible decline of the world's oil production. But it is not just a question of reduced oil production: if oil demand collapses, then the whole world plunges into deep recession, as it happened already in 2009, when prices briefly collapsed down to about 40 $/barrel.

Maybe this is just a temporary fluctuation; maybe things will go back to "normal" in a few months. After all, the market worked some magic during the past 4-5 years that kept oil prices high enough to generate profits high enough to make the industry able to keep producing at the usual levels (and even increase them a little). And these prices seemed to be not so high to destroy demand (not too much, anyway). But, in the long run, it is a no-win game. Depletion makes extraction progressively more expensive and not even the mighty market can work the magic needed to keep selling something that customers can't afford to buy. The oil crash takes time to unfold, but it is happening, and it is happening now.



Ugo Bardi teaches at the University of Florence, Italy. He is a member of the Club of Rome and the author of "Extracted, how the quest for mineral wealth is plundering the planet" (Chelsea Green 2014)


Sunday, November 2, 2014

Hearing on the "EU Energy Security Strategy under the conditions of the Internal Energy Market" - Brussels, 05 Nov 2014





This Wednesday there will be a hearing on energy security strategy at the European Parliament, in Brussels. Yours truly (Ugo Bardi) will be there as one of the speakers. The meeting is open to the public, so I suppose it might be something interesting if some of you happen to be nearby and have the time to participate. The program and the coordinates of the meeting are below; thanks to Dario Tamburrano, Member of the European Parliament, for having made my participation in this hearing possible.


Draft programme


COMMITTEE ON INDUSTRY, RESEARCH AND ENERGY


PUBLIC HEARING Draft Programme
'EU energy security strategy under the conditions
of the internal energy market'
Wednesday, 5 November 2013, 09.00 - 12.30 (JAN 2Q2)

Welcome and opening remarks by Jerzy Buzek, ITRE chair
An independent expert's opinion on the European Energy Security Strategy
- Romas Svedas, Institute of International Relations and Political Science, Vilnius University, Lithuania
- Q&A with Members


The wake-up call we all needed: How to decrease our dependency on EU neighbourhood, from North Africa to Middle East to Russia
- Vaclav Bartuska, special envoy for energy security, Ministry of Foreign Affairs of the Czech Republic
- Q&A with Members


Trends in the world's fossil hydrocarbon production. The effect of declining energy returns
- Ugo Bardi, Professor in Physical Chemistry, University of Florence
- Q&A with Members


The opportunities that emerge from the energy sources of the Eastern Mediterranean and the need for an intensified dialogue with Eastern Mediterranean partners, in particular with a view to creating a Mediterranean gas hub
- Charles Ellinas, CEO of E-C Natural Hydrocarbons Company Ltd
- Q&A with Members


Greening the European Energy Security Strategy: a priority for efficiency, renewables and demand side management under intelligent use of structural funding
- Mrs Doerte Fouquet, Lawyer at BBH and Director of European Renewable Energies Federation
- Q&A with Members


Closing remarks by Algirdas Saudargas, ITRE rapporteur
PRACTICAL INFORMATION
Hearing on the
'EU Energy Security Strategy under the conditions of the Internal Energy Market'



Venue:
European Parliament, Brussels

Meeting room JAN 2Q2

Wednesday, 5 November 2014, 09h00-12h30

Arrival:

Please come to the entrance of the JAN (József Antall) building of the European Parliament facing Luxembourg train station, 1047 Brussels, on Wednesday, 5 November 2014.
Due to security reasons we ask you to arrive between 8h15 and 8h30.



The meeting will be open to the public and will be webstreamed live on the EP website



Who

Ugo Bardi is a member of the Club of Rome and the author of "Extracted: how the quest for mineral resources is plundering the Planet" (Chelsea Green 2014)