Thursday, March 31, 2005

NFI Award of the Week
...and the winner is Larry Baldcock - United (no) Future

United Future transport policy announced
Friday, 1 April 2005, 3:50 pm
Press Release: United Future NZ Party Media statement
United Future transport policy announced

Greater transparency in road funding, the ultimate four-laning of State Highway 1 from Kaitaia to Invercargill, the possible splitting-out of traffic functions from the police force, and driver education in schools are all significant features of United Future’s transport policies for the next election.

Transport spokesman, Larry Baldock, announced the policy at today’s annual meeting of the Automobile Association in Napier today.

Mr Baldock said the party was also committed to the continued construction of the strategic roading networks in Auckland, Tauranga and Wellington (including the Transmission Gully project.)


Wednesday, March 30, 2005

Another gem from Jim Kunstlers Clusterfuck Nation Chronicle

The Hooverisation of George W. Bush
After the convulsion of Word War Two, we went back to confidently marshalling our resources with a vengence. We took all that oil, all the mineral wealth, the raw land, the timber, and other riches and directed it into the dubious-but-profitable project of building a suburban utopia.

We're now in the final act of the industrial pageant, a few minutes to curtain. The Long Emergency that we're about to enter as the world passes the all-time oil production peak will be about the depletion and scarcity of things we used to have in plentitude: energy, electricity, food, water, minerals, with a new crisis of money and credit like a cherry on top. ...

Tuesday, March 22, 2005

The Endless Supply of Oil and Other Fairy Tales

The rigour of science requires that we distinguish well the undraped figure of nature itself from the gay-coloured vesture with which we clothe it at our pleasure.
Heinrich Hertz, 1895

Common bloviated pigeon-chesting by those that believe our drive-by fantasyland will continue ad-infinitum include the following claims;

• Ho hum, heard it all in the 70’s
• Peak oil = chickenlittlism
• The stone age didn’t end because we ran out of stone
• OPEC could simply pump more oil if they wished
• The world is awash in oil
• The market will provide

Obvious logical fallacies aside the final statement has some credibility; we suspect the market will provide with rickshaws and bicycles being high on the demand list.

The point is that the mutterers of such slaver never seem able to offer any coherent argument as to how it is that the price of oil is 400% higher than it was in 1999. Nor can anyone point to the seemingly endless reserves [1] that are said to exist to meet ballooning demand. Certainly in regard to supply and demand within the oil market the empirical facts speak for themselves. None of the hubristic rants inclusive of any of the above bullet points or not, have yet been able to cool the market back to US$11bbl.

Further, all new production due to come online over the next year or two is likely to be offset by existing depletion running close to 2Mbpd per year (ExxonMobil confirm their fields are depleting at 4-6% per year) combined with existing strong demand growth [2].

Although the peak oil model is instrumentally reliable, it has been verified in all oil field production data most visibly in fields that are now in decline since it’s inception in the US in 1971, the actual peak oil date to some extent is largely irrelevant once available supply is surpassed by demand. The debate whether the peak oil model is “true” or “real” or not is orthogonal to the present demand/supply issue. You can happily ignore peak oil at the moment, but you can’t ignore the probability that demand is outstripping supply.

Nevertheless it is a simple observable fact that the peak oil model is descriptively accurate in regard to the oil production cycle. Normative appeals to market principles or human ingenuity do not change geological facts. Furthermore advances in technology serve only to exploit oil reserves at a quicker rate but surely depleting resources at a quicker rate does not solve the depletion problem. The market may well provide, we can be sure it won’t be providing cheap oil, even the flat-earthers are beginning to reluctantly concede this point.

The recent “Hirsh Report”[3] to US Department of Energy describes the economic, social and political costs of peak oil as unprecedented. Hirsh in fact questions the ability of the market to provide adequate solutions. The report looks at the Peak Oil problem from a risk management perspective, Hirsh contending that dealing with Peak Oil will cost trillions of dollars and require years of intense effort. Transitioning to a more fuel-efficient national automobile fleet for example is expected to take more than a decade.

Yet in respect of Peak Oil, from our Government we hear a divine silence. We go about building more roads and infrastructure, we make predictions about how well the economy will do next year, and the year after. The Government has ignored peak oil’s warning signals; many other political parties are equally ignorant.

According to recent analysis on Aljazeera’s web site (Oil Prices Confound Experts, Adam Porter) industry analysts and other “experts” are befuddled by the fact that the price hasn’t fallen. "OPEC isn't running fast enough to meet this train of demand that's growing without any sign of a slowdown," said Gal Luft, executive director of the Institute for the Analysis of Global Security in Washington.

The International Energy Agency (IEA), bastion of positivism, beholder of distended technological hubris are showing signs of worry. This warning was issued by the IEA last Friday, “The reality is that oil consumption has caught up with installed crude and refining capacity," the Paris-based agency said. "If supply continues to struggle to keep up, more policy attention may come to be directed at oil demand intensity in our economies and alternatives”[4]. This revelation comes on the back of upward demand growth and downward discovery adjustments made by the IEA earlier this year.

The typically ultra-optimistic IEA, panderer to neo-classic economic dogma while powerless to do anything about oil price volatility, seem to be suggesting that a crisis is almost upon us. If as Hirsh suggests changeovers will cost (at least in New Zealand terms) many billions of dollars and take a decade or so implement we are likely to see the emergence of serious oil induced problems quite soon. Hirsh cites higher oil prices and oil price volatility as advance signs of peak. The final warning signals are now imminent.

Yet the cavalry is not appearing on the horizon. Evidence is emerging that Saudi Arabia are simply unable to increase production. There have been marked declines in monthly production figures from the peninsula since the end of 2004. If this turns out to be the case and Saudi has peaked then according to Matt Simmons [5] the world has peaked.

A similar scenario faces the FSU. Production figure declines have persisted for several months running. It is progressively evident that production increases both within OPEC and non-OPEC states will prove increasingly difficult to maintain. The limits are being reached.

No, the Stone Age didn’t end because we ran out of stone; we found something better, we replaced stone with iron but this transition took centuries. This time according to Dr Hirsh we have about a decade if we are lucky and a replacement for oil is yet to be identified.

Those disbelievers who feel the need to ridicule the peak oil story ought consider this. If by hallucination or some stretch of the imagination we turn out to be wrong then we merely look silly. However if the detractors are wrong, if the fountain of eternal energy, whatever that might be, is not found soon then the western civilisation we all know and love, contingently reliant upon oil to feed, clothe, house and medicate itself is about to end.

[1]. In 2004 the total world discovery of oil was 7Gb (a total of 3 months or so supply on the world market). 2Gb were in deep-water finds and the cost of exploration alone (not including development and production) exceeded the current net present value of the oil discovered. The world consumed 30Billion+ barrels of oil in 2004. Economies of scale are disappearing as the oil found is spread across greater numbers of increasingly smaller fields. Source – Association for the Study of Peak Oil and Natural Gas, Newsletter #50, February 2005.

[2] IEA report demand growth running at 2.2%, other reports suggest 3%+ is a more realistic figure.

[3]. The Hirsh Report Executive Summary (and link to the full report) is available at

[4]Financial Times, Mar 11, 2005.

[5] Matt Simmons, Founder and Chairman of the worlds largest energy investment bank, Simmons and Co. International. Advisor to the 2001 Bush-Cheney Energy Task Force.

Steve McKinlay
PowerLess NZ

Monday, March 07, 2005

Letter to Wellington City Councillors re V8 SuperCar Race Planned for Wellington

Alick Shaw; Andy Foster; Bryan Pepperell;; Hayley Wain; Helene Ritchie; Jack Ruben;; Rob Goulden; Robert Armstrong; Stephanie Cook

Dear Councillors,

Last week the price of oil again moved beyond US$55 per barrel. This is a 400% increase in the price since 1998 (when it hovered around US$11).This represents a clear trend. Several sources ranging from Venezuela'sPresident Chavez, OPEC's Secretary General (who predicts US$80 perbarrel oil within a year or two) to increasing numbers of geologists,industry analysts and scientists are all singing the same song. Cheap oil is finished and Peak oil is just around the corner. At the time of peak oil production, global demand will surpass the available supply.

Please note. We are NOT running out of oil overnight. We are simply reaching the point where increased production will not be possible. Oil is not an endless resource - there are limits. OPEC's president Purnomo Yusgiantoro is on record as saying last year "there is no more supply."

Dr Robert Hirsh (Consultant to the US DoE) warned last week, "The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and,without timely mitigation, the economic, social, and political costs will be unprecedented."

Dr Colin Campbell of the Association for the Study of Peak Oil and Natural Gas warns "The actual decline of oil will be gradual at less than three percent a year: such that the production of all liquid hydrocarbons in 2020 will have fallen to approximately what it was in 1990. In those terms, it does not appear to be a particularly serious situation. But in reality, it is a devastating development because it implies that the oil-based economy is in permanent terminal decline,removing the confidence in perpetual growth on which the Financial System depends." Dr Campbell predicts peak in conventional oil in 2006 (next year)

With the US "spring driving season" approaching my bet would be we'll see oil move beyond US$60 a barrel within a few weeks.

Apart from at least one notable exception (that I know of) WellingtonCity Councillors, amongst many others, seem to be unable to distinguish reality from illusion. This is unsurprising behaviour from those in power who it seems would uphold a wilful blind illusion of "business as usual", such that continued extraction of support from traditional constituencies occurs rather than facing the harder reality - the economic, social and political fall out that will occur as oil supply is increasingly unable to meet global demand. I suggest people would prefer the truth.

Moving forward with plans for a V8 Street car race without giving this particular issue serious consideration smacks of pitiable ignorance and sheer lack of accountability. Once you verify that the above information is credible, reliable and valid - to continue with your plans for a V8 supercar race is morally culpable.

Politicians both local and national who continue to ignore this issue will eventually be held accountable.


Thursday, March 03, 2005

NFI Award of the Week

New Zealand Customs Minister Rick Barker quoted on the recent petrol tax hike;

petrol prices have fallen and oil prices stabilised, making April 1 a suitable date to bring in the extra charge

I wonder if Rick Barker could pass Level 1 of NCEA Maths? The price of oil is more volatile since the 1970s and the price has risen almost 400% since 1998. This comment is indicative of the level of competancy our Government brings to this issue. (Not Yet Competent!)

Rick Barker you are an idiot!

(in 1998 oil traded at US$11 - today the price settled around US$55, a percentage difference of around 400%).

Wednesday, March 02, 2005

Petrol Tax: The real reason for the hike.

"Some people have wacky ideas,” the new Republican campaign ad alleges. “Like taxing gasoline more so people drive less."

Although I tend to shy away from this sort of speculation - I'd like to propose a conspiracy theory.

Our Government is well aware of Peak Oil, the fact that sometime within the next few short years global maximum peak oil production will occur after which demand will exceed the available supply sending prices skyrocketing well beyond US$100bbl, oil production will begin an inevitable and permanent decline, with depletion figures in excess of 2-3% per year, resulting in mass global oil shortages, more resource conflict, social chaos, economic calamity, probable closure of the Warehouse meaning you'll have to do without your plastic toilet seats, fishing rods and cheap wetsuits from China.

Thus the 5% Petrol Tax is an underhanded market signal. A signal that alternatives need to be developed to our energy hungry, drive in utopia, suburban McMansion, recreational shopping lifestyles. The petrol tax is a dissuasion to you purchasing that obese black V8 SUV you had your eye on. It is a signal to the market to use alternatives such as rail transport, rickshaws and Goggomobils.

The revenue gathered from the new petrol tax will NOT infact be spent on thousands of kilometres of roading, a complete and utter waste of resources, a piteous investment in an infrastructure that has absolutely no future. In actual fact the Government gives a toss about whinging Aucklander's and their boring traffic congestion problems as much as the rest of us - Change the record Aucklander's. The rest of NZ is not interested - we are sick of your complaining, you choose to live there - suck it up.

You're worried about economic growth - in a few years, once surplus oil supply is well and truely history there will be no more economic growth. Economic growth depends on growing energy supplies. That growth is all but over. Make no mistake, as energy declines so will the economy.

So, instead of the petrol tax being spend on roads, the surplus will be spent on developing sustainable cities with energy efficient transit solutions, importing rickshaws from China obviously, reconditioning scooters and Cub Commuters.

Motorists, SUV lovers and the AA, be prepared for more motoring related rude awakenings. This is a warning especially directed at those perverted obese egotistical consumers living in recreational shoppers fantasyland. Global warming, gas guzzling V8 SUVs drivers are in for a fright as their registration fees quadruple, this will be an incentive to get over your egos, lose some weight and get on your bike. This contrary to what the Government and the media will tell you is NOT so that spagetti junction can be sorted, but so that more rickshaws can be imported, the railway system can be improved and some kind of meaningful more efficient transport system can be developed that doesn't involve overweight mothers (that according to Helen Clarke should be at work anyway) driving their chubby kids 400 metres down the road to school in V8 4WDs.

Cast your mind back to the chaos and mayhem, not to mention downright violence and aggression at the petrol pump back in the heady "carless days" era. SUV drivers had better sign up to martial arts class. There is gonna be some nasty irritation at you lot.

The funniest thing of all is that the Government blindly following the IEA's assurances, consumers blissfully living in lala land whilst driving their Jeep Cherokee's to the Warehouse on Saturday morning all the time munching on Double Whoppers with cheese are all unaware of the events unfolding before our very eyes.

Oil has increased 300% since 1999 - and it's headed higher. Why, there is no more supply for demand growth. Without cheap oil, the only safe option is to start dismantling our complex economies

A couple of years then it's Game Over!

Petrol Tax - it's just a warmup - get used to it.

Tuesday, March 01, 2005

NZ Politicians Inflicted with Acute Stupidity

It may be lost on some people that a rise in the price of oil of almost 300% since 1999 is a trend. It's a trend that won't go away.

New Zealand politicians of almost all persuasions (with the possible exclusion of the Green Party) continue to bang on about how the current high price of oil is an abbertation. That prices this year some time will return to normal levels.

In fact the NZ Government with it's swollen luddite head firmly placed deep in the sand still believes that oil will return to around US$20 per barrel, that economic growth and increased oil supply will continue forever and that the best thing at present for the NZ economy is to spend a few billion dollars on more roads.

This from the last Energy Supply and Demand Projections - Ministry of Economic Development.
"Oil prices rising from US$20/bbl in 2004 to US$25/bbl by 2020 and constant thereafter; "

The current price of oil at the time of this posting was US$51

Meanwhile our politicians are arguing and bickering with one another like a rabble of retarded galah's as to how we ought to spend billions on more roads to solve our congestion problems. The solution to all our woes so it seems is to continue to invest in infrastructure that has absolutely no future.

Matt Simmons informs us that world demand for oil is currently about 82 Million barrels per day. It is exceedingly unlikely that any of the key oil producers, Venezuela, Norway, Saudi Arabia, Iraq, Iran, Russia the US or the UK can increase production. In fact many are already beyond peak production.

The SIMPLE FACT lost on our idiotic politicians is that oil demand is very close if not at total maximum global supply. Lack of capacity exists right across the supply chain, from the well-head to refinery.

If oil demand grows at the same rate this year as it did last - we have perhaps a year or two left of happy go lucky drive-in utopia.

Meanwhile our fuckwit politicians are screwing our future down the drain assuming that happy-clappy economic growth will continue forever and ever - they are wasting billions of our dollars flushing them down the toilet by building white elephants highways to nowhere.

When will these dickheads wake up?