Plenty Of Oil

A very good two-minute animated overview of fossil energy and energy industry PR. Heinberg is spot-on. We’re not “running out” of oil. That is not, and has never been, peak-oil theory. It’s rather a supply and demand issue: extraction of “economically cheap” oil (as we enjoyed for 100+ years) is over. The cheap and abundant oil is gone and will never return (abiogenic theories notwithstanding). We are now entering into the “hard to get” oil phase (deep water, frack, oil sand, shale, polar, etc.) which comes at increasingly higher prices. As world energy demand increases, oil will continue to get more expensive. And that’s the problem: just a few years ago, energy represented less than 8% of median household expenditure. It is now around 13%. Health care and energy are the two most rapidly rising common costs in the U.S. economy, rising far faster than inflation.

What Heinberg doesn’t mention is natural gas. In the USA, newly available (fracked) NG reserves will probably give us many additional years of cheaper NG energy (but with significant environmental penalties – see Julian Lennon’s new campaign — watch the video on his site). Newly fracked NG reserves have already caused a number of coal plants to be shuttered. This is great news for N. America, but in the global energy picture it doesn’t change much. We are still (as a global community) up against rising long-term fossil energy supply constraints, which will almost certainly be the #1 structural cause of continued global debt and economic struggle moving forward.

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