Peak oil
Throughout all of our lifetimes oil has been an abundant resource for which we have paid minimal cost. We expect this. We've been guzzling the black gold for over a century now. Demand has increased substantially since 1900 (150 million barrels) and supply has stayed just one step ahead. In 2000, 28 billion barrels of oil was produced - a 180 fold increase. We are a society dependent on oil, but how much longer can this supply keep up with demand?
In 2007, 31 billion barrels of oil were produced, but reserves of only 9 billion new barrels were found. Nearly all of the easy oil has been extracted, only the difficult reserves remain. In Canada they are destroying delicate and undisturbed environments by mining tar sands where it takes 2 tons of sand to yield one barrel of oil. Plus, the net energy yield is low; it takes the equivalent of two barrels out of every three recovered to pay for all the energy and other costs in getting the oil from the oil sands.
Production has been sitting at about 84.5 million barrels a day for
nearly three years now, somewhat resembling the top of a bell curve. If
oil hasn't peaked by this year, then perhaps next year. In any case,
it's close enough. New Zealand in particular needs to make some serious
and sustainable changes. When the lottery for the remaining barrels
starts, you can be sure that we won't even get a ticket.
Right
now we are seeing dangerous new problems emerge as Wheat and Corn are
being diverted for use as biofuel. America's ill advised plan to reduce
their dependence on oil by increasing the use of biofuels for transport
is creating a new market for grain. The price of Wheat and Corn has
increased dramatically over the last two years; they have both nearly
doubled in price. The world's appetite for crop based fuels is
insatiable. The grain required to fill an SUV's 90 litre tank with
ethanol just once will feed one person for a whole year. If the entire
U.S. grain harvest were to be converted to ethanol, it would satisfy at
most 18 percent of U.S. automotive fuel needs. If the biofuel value of
grain exceeds its food value, the market will simply move the commodity
into the energy economy. If the price of oil jumps to $100 a barrel,
the price of grain will follow it upward. If oil goes to $120, grain
will follow. The price of grain is now keyed to the price of oil.
New
Zealand needs to make some fundamental changes. We need plug-in gas
hybrid cars. These can be recharged at night, meaning all short trips
are powered by the battery and the gas is saved for long journeys. For
this we need a sustainable electricity grid by banning the use of coal
fired gas generation. This can be achieved by increasing our wind
generation capacity and adopting wave and tidal generation. Every New
Zealand home could be a world leader in energy efficiency. This means a
solar panel to heat water on the roof and banning incandescent light
bulbs for further energy reductions. We could go one step further and
develop our railways into something useable for both freight and
passengers, make it cheap and then ban pointless domestic air travel.
What we need most is for the government to stop the rhetoric and start
actually doing something.
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