Tuesday, June 8, 2010

Media flirting with peak oil following Gulf spill

The ongoing Gulf of Mexico oil disaster is bringing the mainstream media a little closer to the peak oil debate.

It’s been out there on the business pages for a while, but it is beginning to make its way into news pages – via comment columns, and in a roundabout way, of course. It’s still at the flirtatious stage, but its beginning.

Media flirting with peak oil following Gulf spill

It’s a hot topic, and few mainstream writers are actually throwing their weight behind the concept of Hubbert’s peak (M King Hubbert, left). Right now, they are mentioning peak oil to deny it, but doing so with words that clearly agree with the concepts behind the issue. Perhaps it’s a coded way of informing people in the know that the writer is in on the bigger picture, but can’t actually come out and say it. Or at least not right away.

Whatever happens, as a journalist, I have observed this process of challenging new issues being brought into the newsroom. (It’s been going on most recently with climate change.) In order to get the newsdesk to allow your copy on an issue to go into print, it has to be something that the bulk of the readers agree with. (How many times in my career have I been told “People don’t want to read that”? Unfortunately, these days, if you have to explain it, it doesn't belong on a news page.)

I think we are a number of months away from peak oil hitting the headlines; when it does, I’d suggest it will happen in Europe first, and gradually make its way over to the US. I’d put my money on the English media – being so much more cut-throat and generally much less pompous about itself and less scared of offending big business – making the first move.

I’d also suggest that the sooner industry leaders and politicians take up the peak oil cause, the quicker this will come about. It’s already happening to some degree in England, with the UK Industry Task Force on Peak Oil and Energy Security’s February 2010 report and subsequent government think tank meeting on the issue. (It needs more leaders, and without ties to the energy industry or with a public perception of being publicity seekers.)

Anyway, that’s pure speculation. Right now, the issue behind the whole BP Gulf of Mexico disaster is why we are having to explore for oil at such depth?

A column in the June 7 Daily Mail newspaper – itself a very conservative, pro-establishment UK newspaper – headlined A slippery business: It's the end of easy oil - and maybe BP too, asks just this. Writer William Rees-Mogg, a Peer and former editor of the Times, considers “the growth in demand for oil, and the shortage of supply.”

From the outset I have to observe that he’s clearly using the theme of “the limits of Man's power over Nature” as a hook to hang the whole thing on. This, it seems to me, is the excuse to write about the decline of oil. Early on it states:

Nobody would be looking for oil at 5,000 ft if there were new supplies in shallower waters.

The oil market registers the scarcity of oil. Last week oil was $74 a barrel for Brent Crude.

The progressive rise in the price over the past 30 years has been a measure of the growth in demand and the failure of supply to meet that demand.

If the oil companies are to satisfy their markets, they have no choice but to develop high-cost sources which in earlier decades would have been regarded as hopelessly uneconomic.

This leads Rees-Mogg to a consideration’s of President Barack Obama's decision “to make the United States nearer self-sufficient in oil” by promoting offshore drilling, and the damage to this policy caused by the BP Gulf of Mexico spill.

This is when we get to the flirting-with-peak-oil section. It’s very well crafted, considering that Rees-Mogg just can’t – yet – come out and say it:

There are three facts which have to be recognised. The first - and most important – is that the age of readily available petroleum is over.

For some time there has been a theory that the world had already reached 'peak oil': the point at which the growth of demand for oil exceeds the growth in supply.

The BP disaster goes beyond the doctrine of peak oil. We are now at the point of 'peak technology', where the risks of drilling technology have become greater than society is willing to support.

In the United States, the oil risk has become a political risk.

It may seem like a strange comparison to make, but I’d suggest this is the way that a writer in an establishment newspaper would approach a controversial issue like the assassination of president Kennedy. He would, for instance, write about the US government’s strange behavior before and after the event, especially the apparent stonewalling through the various investigations, before denying the assassination buff theories. (It’s called having your cake and eating it.)

On the subject of the Gulf oil disaster, it looks as if the US government is renewing its commitment to a freeze on shallow water drilling also.

A June 2 Associated Press report that “the first new Gulf of Mexico oil well since President Barack Obama lifted a brief ban on drilling in shallow water” has been given the go ahead has been followed by one stating: “The Obama administration is blocking all new offshore drilling in the Gulf of Mexico, a day after regulators approved a new permit for drilling in shallow water.”

This, APNewsBreak: Feds halt new drilling in Gulf, continues:

An e-mail Thursday from the Gulf Coast office of the Minerals Management Service says that "until further notice" no new drilling is being allowed in the Gulf, no matter the water depth. A copy of the e-mail was obtained by The Associated Press.

The announcement comes a day after the minerals agency, which oversees offshore drilling, granted a new drilling permit for a site about 50 miles off the Louisiana coast, 115 feet below the ocean surface. Environmental groups accused the administration of misleading the public by allowing work to resume in waters up to 500 feet deep while maintaining a moratorium on deepwater drilling.

I’ve previously written about the sheer amount of oil production in just the US portion of the Gulf –3,858 oil and gas platforms in 2006, and, by 2008, 141 producing deepwater projects and 7,310 active leases on oilfields in the area – so don’t go expecting much of a sea change in the oil industry.

Obama’s response looks like politics: to show leadership, but just for long enough for the public to forget about the issues – say, like six months – before quietly handing things back over to the oil industry. If Obama wanted to control the offshore oil industry, his first step would be to increase, or preferably completely remove, the liability cap for oil spills. It currently stands at $75 million – speculation has suggested that is should rise to $10 billion. (Aside from the PR value of showing it’s a good corporate citizen, BP has probably spent more than $1 billion on the Gulf spill, and could in theory walk away from the whole disaster – which is probably why the US government is putting together evidence suggesting negligence, leading to a possible court action.) If he wanted to promote futhur oil exploration in the region, at least until the media interest in the BP spill has died down, he would have to do some peak oil talking of his own.

Gulf spill won’t dampen U.S. appetite for oilDeepwater drilling going ahead despite eco disaster

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