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Back to Reality: We are All Children of Oil

Back to Reality: We are All Children of Oil

Colin Campbell, founder of the Association for the Study of Peak Oil (ASPO), speaks in Pisa in 2006. Officially, the Powers that Be (PTB) ignored the ASPO message, but it could be that they understood it all too well. That would explain many things about the current situation. For two years, we thought that all our problems were caused by a microscopic, peduncled critter. Now, we are back to reality: we are all children of oil, and we cannot survive without it.

A few days ago, I found by chance on my shelves some documents from the 2006 conference of ASPO (the association for the study of peak oil) that I and others organized in Pisa, in Tuscany. The conference had a certain global resonance: it was sponsored by the Tuscan government, hundreds of people from all over the world came to attend, and the international media commented on it. It was part of a wave of interest on peak oil and its consequences. Just as another example, see the leaflet on the right that I also found rummaging among old documents. It announces a meeting to be held in the Tuscan countryside in 2004, titled, “The Party is Over“, and subtitled “How to exit from the petroleum-based economy“Today, it looks as if these things are a hundred years old. How was it that there was an age in which you could express this kind of subversive thoughts in public and be given some space in the media? And how could we delude ourselves into thinking that we could have convinced that nebulous entity called “humanity” that we were running out of our natural resources, crude oil in the first place? Even more subversive, that we should reduce consumption and move to renewable sources before it was too late?

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Demand destruction and peak oil

Demand destruction and peak oil

Roger Baker is a transportation and energy reform advocate based in Austin, Texas. Long time member of ASPO, we actually met at one of the first ASPO conferences, the one held in Pisa, in 2006. Here he discusses the current situation with crude oil and the global economy. 


We are fully under the influence of petroleum demand destruction. The global oil market can’t function without real oil production price discovery, which doesn’t exist in the currently deflationary global economy, which forces indebted producers to sell far below cost.

Both supply and demand seem to cyclic in nature and we are not finished with the supply destruction phase, which can only be revived through a globally realistic oil trading price, which nobody knows. This is an unknown until demand destruction also runs its course. The global demand in the oil supply-demand balance that sets the global oil price cannot be known until we can understand where the global economy is headed. The global material economy seems to be contracting as the Baltic dry index, trucking, and railroad profitability seem to affirm, even ignoring oil prices and Chinese economy.

The reality is probably that a falling EROEI and the end to cheap oil after ~2005 made our finance capital investment growth less profitable. But this fundamental shift has been hidden through easy central bank credit and fiat currency generated on demand to pay interest on a growing mountain of unpayable debt, with a shift of debt from private hands to public, such as away from Wall Street toward Fed and US Treasury obligations. Now we see the world’s major central banks each independently creating their own fiat currencies to preserve a trading advantage, led by the dollar as the world’s standard reserve currency.

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Peak Oil Review – Dec 22

Peak Oil Review – Dec 22.

1.  Oil and the Global Economy

Oil prices were volatile last week with New York futures trading around $55 a barrel and around $60 in London with little change at week’s end. In the absence of any solid news on supply or demand, traders jumped in and out of the markets in a attempt to find a price bottom.  On Thursday, London’s Brent closed below $60, the lowest close since May 2009, before rebounding, largely on optimism and technical issues, to close out the week at $61.38.

The issue of just where the bottom of the price decline will be found is the subject of much commentary. Most observers are saying that the markets will likely go lower next year as more supply is slated to come on line, and the markets are expected to remain weak. The UAE’s oil minister and President Putin both mentioned $40 a barrel in public recently.  A more sophisticated analysis was published by Reuters pointing out the reasons we could see a new trading range, with a bottom at $20 a barrel and a top at $55. Under this scenario, US shale oil producers, who can be very fast on their feet due to the large number of wells they must drill every year to maintain production levels, would become the new swing producers.

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Olduvai IV: Courage
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Olduvai II: Exodus
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