Freak Oil

During the state of the Union address on January 31st 2006, Gorge W Bush, President of The United States of America said,
“America is addicted to oil”

(http://www.whitehouse.gov/news/releases/2006/01/20060131-10.html).

This has been remembered as a famous quote. However, just before that he made another interesting statment

"Keeping America competitive requires affordable energy".

At the moment the world is entering a transition. Global warming, and the associated issues (sea level rise, disease increase, food shortage, land shortage, economic loss, health issues, ozone depletion etc.) have highlighted humans over burdening and care free attitude towards are planet, and the ramifications for doing this. Many believe that Global warming is just a scare tactic, a method for promotion of nuclear expansion, scientific paranoia, a natural phenomenon or hippies with to much time on their hands.
If you Google “Global +Warming+Hoax” you get 143,000 responses with links to books, WebPages and posted videos and scripts.

Anyone who has seen Al Gore & Davis Guggenheim’s documentary film An Inconvenient Truth will witness a clear and scientific piece of cinema that discusses the subject concisely. But now there is another crisis in the political/environmental arena.

The Peak Oil concept has been around since the 1950's. Marion King Hubbert, a Geo-scientist working for Shell predicted U.S. oil reserves would peak in the 1970’s (SEE:http://www.hubbertpeak.com/hubbert/).

The U.S. became a net importer of oil in the 1960’s. Then it was importing 1,815, now the U.S. imports 12,220 thousand barrels of crude oil per day (http://www.eia.doe.gov/emeu/cabs/topworldtables1_2.htm). It is also one of the largest NON OPEC oil producing nations (laying third behind Saudi Arabia and then Russia). So Hubbarts theory was corect. The U.S. hit the point where oil prices soared, and the person on the ground felt it in their pocket through the increase in petolium prices, that happened in the 1970's. The U.S. does though have the economic advantage of large oil production domesticly (the largest U.S. oil fields are in Alaska & Texas much of this going to Canada). This it can then sell and use as captial for future investment. Basic economics states that it is better to regulate prices rather than bloat them through flooding the market.

“Most of the world's largest oil consumers are also net oil importers. Of the world's top ten oil consumers in 2004, only Russia and Canada were net oil exporters” http://www.eia.doe.gov/emeu/cabs/nonopec.html

According to the DTi’s Development of UK Oil and Gas Resources (2001), the U.K. produced 126 million tonnes of oil in 2000. This North Sea Oil production was divided between the oil fields of Tern, Ninian, Bruce, Dunbar, Brae West amongst others.
In 2000, the UK was importing 9.0 billion pounds worth of crude oil and petroleum products and exporting 15.6 (http://www.berr.gov.uk/files/file39881.pdf). The U.K. became a net-importer of oil in June of 2004. (http://www.energybulletin.net/1604.html) By the end of the year it was exporting 19.8 billion pounds worth, compared to 22.0 £ import (BERR, 2007).

Like the U.S., the U.K. is experiencing ever increasing cost in transportation, heating and food.
The energy market, built on fossil fuels is becoming out-sourced. With oil field production down, oil producing nations becoming volatile and economic constraints on the horizon, the price of oil is set to increase dramatically (http://www.worldoil.com/Magazine/MAGAZINE_DETAIL.asp?ART_ID=3163&MONTH_YEAR=Apr-2007R=Apr-2007R=Apr-2007).

"oil consumers need steady supplies of oil, and oil producers rely on steady demand. If demand changed suddenly it would have a major impact on the profitability of oil producers and the economies of many countries around the world" OPEC, 2007. http://www.opec.org/library/FAQs/aboutOPEC/q19.htm

Just recently, the UK Government published their White Paper on Energy, Meeting the Energy Challenge May 2007.
In it Rt Hon. Alistair Daring MP state’s
“We are determined to become a low carbon economy.. this white paper sets out the framework for

action… toward tackling climate change and ensuring secure and affordable energy supplies” p. 5.


Furthermore, the paper details the government’s expectancy for the drop in UK oil production. This will only serve to out balance the UK economy. The proposed Energy Bill wants to tackle this isuue.

So the transition is begining. ?