Simmons: The Real Oil Shock

[Strelnikov_]

The Real Oil Shock
By Matthew Simmons

http://www.time.com/time/globalbusiness/printout/0,8816,1106299,00.html

The bottom line: the global oil supply has probably peaked. While the world expects to consume 120 million bbl. a day two decades from now, actual supply may be half that rate. This conclusion aptly portrays the potential magnitude of the energy ditch we are now in. It is impossible to calculate the odds of this supply-demand imbalance happening, but prudent planning argues that the world should assume the bleaker scenario. Then it follows that a global plan to use oil more rationally must be urgently developed and implemented.

. . .

In the near term, the global economy needs to significantly reduce its oil intensity. Because 70% of the world's oil is used as transportation fuel, that would be the place to start. We need to create new forms of transportation fuels as well as reduce the quantity of goods and people moved by cars and large trucks. If a high percentage of products now transported by large trucks were shifted to the global rail system, an efficiency savings of three- to tenfold could be realized. If those goods could be shipped over water rather than rail, even greater efficiencies would be realized. While such changes will take time, they have to succeed.

We also need to pull out all the stops to find new oil supplies. Actions like drilling in the controversial Arctic National Wildlife Reserve and exploring for more oil and natural gas on the outer continental shelf of North America suddenly take on a sense of urgency. They would not cure the problem but could buy time to offset shrinking supply.

A second change would come through embracing "distributed work." Most commercial businesses still operate on a concept that all employees need to work in the same office building to communicate. That was a necessity 20 to 40 years ago, but now faxes, e-mail, telephones and video conferencing allow people to work where they live, eliminating several hours of daily commuting time. And we need to manufacture more products and grow more food close to markets where they will be consumed.

. . .

His first conservation measure (transportation efficiency) makes sense.

The second measure, drill everywhere, is not really a pleasant thought. Also, I have to wonder what the EPR of these new fields would be, considering the 'cheap oil' has already been found.

The third measure, distributed work, seems reasonable on a small scale. However, I feel in the future there will be a lot fewer 'office' jobs that lend themselves to working from home. What I can see is a manufacturing base similar to Germany during WWII, where work took place at small plants distributed throughout an area. In the case of Germany, it was to keep from getting bombed. In the future, it would be to locate the workplace at a reasonable travel distance for workers.

[NorCalDem]

1. I've said it before, and I'll say it again

they can drill in ANWR, as long as I see a tax break or a check from the profits from oil sitting under the ground in MY country. If MY government is going to lease the land to Exxon-Mobil for fractions of the cost of the land, and then use MY/OUR tax dollars to subsidize the drilling for oil, and finally, allow Exxon-Mobil to keep all the profits, then WE have a problem!

[phantom power]

2. I once proposed a deal.

They can increase drilling, if they also make a serious effort at increasing conservation, and migrating to non-fossil energy sources.

Of course, neither conservation nor fossil alternatives are seriously on the table.

[Kolesar]

3. 9 x 9 hour workdays per two weeks instead of 10 x 8 hour workdays

Ban Sunday gasoline sales on the last weekend of each month.
Have the Bureau of Motor Vehicles issue gas ration coupons for Hummer owners.
Break up the outlet malls and use the land to grow crops.