THE COMING OIL CRISIS - NOT IF, WHEN

Not being one to scare monger for the sake of it. I feel as a motorist, a Capri man and a responsible citizen the need to publish a pretty hard hitting summation of what world events mean and what effect they will have on our daily lives.

It's not meant to be a political statement - it's just an article I found and added a few thoughts at the end. Sober reading my Capri friends.

Two things to note are:

1. the days of cheap oil and cheap energy are over.

2. There is only one good time to own and run a Ford Capri 280 - that's right now. Why? Because the aims of those behind each global and local conflict is to dramatically affect the way the West runs it's daily life. The main way of doing that is to hit the West in factors that impact on every day living i.e. price of oil, ergo price of energy, ergo price of fuel, ergo cost of living, ergo your disposable income is depleted. The things we take for granted today will become rationed and exhorbidant luxuries for the very rich someway down the road. And that's what they want. Who are 'they'? You must read, research and watch newscasts for yourself.

Jeremy Leggett, a former oil man, wrote an article in ‘The Independent’ (20/1/06) entitled, ‘What they don’t want you to know about the coming oil crisis.’ He wrote:

‘A spectre is haunting Europe - the spectre of an acute, civilisation-changing energy crisis. … We have allowed oil to become vital to virtually everything we do. Ninety per cent of all our transportation, whether by land, air or sea, is fuelled by oil. Ninety-five per cent of all goods in shops involve the use of oil. Ninety-five per cent of all our food products require oil use.’

The world consumes more than 80 million barrels of oil a day, 29 billion barrels a year. This figure is rising fast, as it has done for decades. The US government expects that global demand will grow to around 120 million barrels a day, 43 billion barrels a year, by 2025. However there is no way that the oil industry can produce this amount of oil. Leggett says, ‘The most basic of the foundations of our assumptions of future economic wellbeing is rotten. Our society is in a state of collective denial that has no precedent in history, in terms of its scale and implications.’

The modern industrial world has been built on the supply of energy keeping the electricity supply to our homes and work places running and fuelling our transport system which ensures that goods and people can move from place to place around the world. Without the energy sources - coal, oil, gas and nuclear power - the whole system crumbles.

In America that possibility is beginning to be considered by those who see the phenomenon known as ‘Peak Oil’ as the next big threat to the western way of life. Peak Oil is the point at which oil production reaches a plateau before it declines while demand for oil consumption continues to rise. Once worldwide demand for oil outpaces worldwide production (of oil by a significant margin the price of oil will sky-rocket, oil-dependent economies will crumble, and resource wars will explode.

Matthew Savinar has written an article on this subject on the internet site http://www.lifeaftertheoilcrash.net. He writes, ‘Civilization as we know it is coming to an end soon. This is not the wacky proclamation of a doomsday cult, apocalypse bible prophecy sect, or conspiracy theory society. Rather, it is the scientific conclusion of the best paid, most widely-respected geologists, physicists, and investment bankers in the world. These are rational, professional, conservative individuals who are absolutely terrified by a phenomenon known as global ‘Peak Oil’.’

When will this happen? According to Savinar, ‘Some geologists expect 2005 to be the last year of the cheap-oil bonanza, while many estimates coming out of the oil industry indicate ‘a seemingly unbridgeable supply-demand gap opening up after 2007,’ which will lead to major fuel shortages and increasingly severe blackouts beginning around 2008-2012.’ Richard Heinberg, in his article ‘Smoking Gun: The CIA’s Interest in Peak Oil’ says ‘A growing consensus of petroleum geologists places this event in the mid-range period of 2006 to 2015.’

Savinar dismisses alternatives to oil as sources of power for the current world system as fantasy. Green alternatives like solar, wind and wave power produce only a tiny fraction of the power now available through oil. Hydrogen as an alternative to oil does not work either due to the huge costs of producing it and the vast problems of storing it. He says there is no time to develop the huge infrastructure needed to switch from an oil based industrial system to an alternative one. Nor is there the political will or the financial capability.

Savinar sees an inevitable collapse of the US economy coming which will drag down the rest of the world. ‘As the driver of the world’s economy, the demise of the US will take down other industrialized countries. The financial dislocations wrought by the coming oil shocks could set the stage for a series of destabilizing resource wars and ‘currency insurgencies’, in much the same way Germany’s financial meltdown during the Weimar Republic of the 1920s set the stage for the rise of Third Reich in the 1930s and World War II in the 1940s.’

Added to all this is the fact that the present suppliers of most of the world’s oil are anything but reliable. 70% of global proven reserves of oil are to be found in the Middle East. Saudi Arabia has the world’s largest reserves with 264.2 billion barrels of proven oil reserves (25% of the world total). Oil from this area is the easiest to extract and export. Recent finds of oil in the Caspian Sea area and in Central Asia are not as great as was originally hoped and these areas are landlocked so getting the oil out involves building pipelines through such unstable regions as Afghanistan to the south or the Caucasus region to the west. The vulnerability of pipelines to terrorism has been shown by the frequent attacks mounted by insurgents in Iraq.

A disruption anywhere could cause market panic and spiralling prices. Texas oil analyst Matt Simmons has written a book ‘Twilight in the Desert’ which warns that the skyrocketing price of oil could plunge the world into war. One spark which could ignite this fire is Iran’s nuclear programme which is causing worry about possible disruptions of the supply of oil from the Middle East. In January 2006 Iran threatened to cut oil supplies if Europe continued to meddle in what it sees as its right to develop a nuclear programme. It has also threatened to block shipping through the Straits of Hormuz at the entrance of the Persian Gulf if its nuclear facilities are attacked. Every day, 15 million barrels of oil pass in tankers through these narrow Straits.

Production of oil is in decline in more than 50 oil-producing nations, including the USA and Britain. Discoveries of large oil fields are decreasing year by year, while the demand for oil is constantly increasing. In particular China and India are already having a major impact on both oil resources and the environment on account of their huge populations and growing numbers of people prospering as a result of economic development. There have been large finds of oil in Russia with deep wells sunk in Siberia. However Russia could well prove an unreliable source of supply.

January 2006 began with a crisis caused by Russia demanding a huge increase in charges to Ukraine for its gas supply and threatening to cut supplies if the price was not paid. Many saw this as Russia punishing Ukraine for its pro Western policies. But the threat to turn off the gas supplies in the middle of winter did not just affect Ukraine. For a few days countries across Europe watched nervously as the crisis unfolded.

The deputy chairman of Gazprom, the giant Russian company that controls the flow of Russian gas to the west came to London to reassure Britain that there would be no risk of disruption to British gas supplies. The very next day, temperatures in Moscow broke a 50-year record, plunging to minus 30C. Gas normally exported was diverted to the home front. Supplies to the West fell. Nervousness on this subject was increased by news reports that Gazprom is seeking to buy a controlling share in British Gas.

As huge price rises for gas supply are announced, the prospect of the source of this supply being in the hands of a power which once confronted the West during the Cold War is hardly reassuring. After all Russian President Putin once wrote a thesis saying that Russia could use its energy resources to regain its global power. Russia supplies a quarter of all the gas used in Europe and 90% of it flows through Ukraine. This supply is scheduled to increase when the giant pipeline now being built under the North Sea from Russia to Germany is completed. Britain will be at the end of the line for this gas which will become vital as our North Sea oil and gas decline.

It's like the parable of the man who built his house on sand.

Sooner or later the storm will come and this 'house' will crash.

Oil has been turned into a commodity as indispensible as blood, with the misconception it will just flow forever................

My rationale for posting this is to highlight something we never want to think about. It's like those envelopes containing bills and bank statements - we never really want to open them up and face the music do we?

As a person who loves motoring and loves the freedom (huh!) that is afforded by hopping into my beloved Capri 280 and taking to the high roads, I know for sure that there is a relentless attack on motorists as 'Cash Cows' by local authorities, police, government, legislators, etc. The energy crisis makes all those pale into virtual insignificance.

My ulterior motive in all of this is to say - if you are one of those people (who contact me daily) who have always dreamed of having a Capri 280 but are just waiting for 'the right time' to buy. Well - that time is now. It will never get better than today.

If you don't believe me - wait until 2008, 2010 etc. Motoring will seem 'the Good Old Days' then. I wish I was totally wrong on this but I've done the math.

We are an Island at the very end of a long-pecking order with other nations controlling and pricing our fuel and energy.

Not everyone believes this - so for a balanced viewpoint on Peak Oil Myths click here

Irrespective of which report is right - just ask yourself - am I spending much, much more on fuel than last year and the year before? If the answer is yes then you know which argument is correct. Do this calculation again in 2007, 2008 and if any oil is still flowing our way see how much we are expected to pay. Oh yes, by which time the government will be charging us by the mile for every journey we make, on top of fuel, on top of toll roads on top of new penalties and spy-cams hidden in cats-eyes........