NVDL: In July and August 2007, South Africa faced critical shortages of fuel.Those shortages in 2007 you may recall had a lot to do with industrial workers striking. Well, there were also fuel shortages in 2006 and 2005. Other shortages have been blamed on the limited capacity of a Durban to Johannesburg pipeline and on the refining capacity of, for example, Durban's Sapref facility. The shortages have been across the fossil fuel spectrum of course - from fuel for cars, to fuel for planes, to coal and even gas.
While the explanations for these shortages become more colorful (everything from lightning strikes to missing cyclinders, to inclement weather), the incontrovertible bottom line is that these shortages all have one thing in common: too many people, creating too many problems, with not enough resources to go round.
A simple metaphor for our problem is the traffic jam that each of us forms part of on the way to work. In South Africa there are daily traffic jams all across the country, from Johannesburg to Cape Town. Even Bloemfontein experiences gridlock. Jim Kunstler refers to the bottlenecking of resources in cities as a clusterfuck. Essentially what happens is the intense concentration of users causes so much congestion, paralysis insues. The system in effect becomes strained, and like a computer that has too many systems called up, it eventually hangs itself - it crashes.
Although we experience this on a daily basis, and we're aware of similar problems in the other big cities of the world. I have experienced the traffic firsthand in South Korea, where it may take as long as 9 hours to return from a weekend trip (covering 300km). Even with alternative transport, London's traffic is a nightmare. So too all of the world's larger cities.
In South Africa we are particularly depedent on cars and trucks to move stuff. The transport sector is 97 percent dependent on petroleum-based energy, with just 3 percent of transport energy coming from electricity. We import 60% of our fuel. More than 80% of freight is shifted on our highway system. Moreover, South Africa is one of the world's most energy intensive consuming countries - per capita - in the world, and the world's 11th top polluter per capita. Can South Africa continue to use fossil fuel resources the way we do? No. South Africa's supply shortage scenario might be a temporary glitch that we could sort out down the line - if it was a problem unique to South Africa. Many of us are well aware that most of the top countries in the world, principally the USA, China, Australia, Canada, Russia, Japan, Saudi Arabia, Japan, South Korea, Germany, the Netherlands and the United Kingdom are struggling with similar issues.
And indeed, if it seems we cannot continue consuming unabated, we are seeing a reversal (with 7000 vehicles and 2500 homes repossessed in Gauteng every month) in voracious demand.
So when the oil price sinks below $100 is this a reprieve from these repossessions? Are we offered an opportunity to once again consume as though there was no tomorrow? It would seem so, except that I predict oil prices are due to rocket upward beyond $147 starting now.
Many so-called experts have cited 'demand destruction' as the ultimate solution to keeping oil prices in check. This obviously ignores the reality of our common conundrum. And that is that whether here in South Africa, or on the highways of America, hundreds of millions of people are living a lifestyle, and part of arrangement that is oil addicted (fossil fuel dependent). And while higher prices can motivate us to make some discretionary choices, essentially we don't have any arrangements in place if, for example, petrol stations were to run dry tomorrow, or 5 years from now.
The situation in the USA's Gulf of Mexico post Gustav and Ike is that:
1) Fossil fuel reserves are at an 8 year low, America has a 21 day supply.
2) After Ike, America has lost 1-3 million barrels per day of refining capacity.
3) Shortages are already taking place in Louisianna and other southern States, and this is set to worsen over the next few weeks.
4) The Colonial Pipeline is down, America's biggest - moving 2.4million barrels per day
5) Total loss of production therefore is around 5mbpd.
America faces this decision now: do they hike gas prices to an unutterable $10 a gallon (and so limit hoarding) , do they keep prices 'reasonable' but ration motorists, or do they allow a free for all until it's all gone?
You might ask how relevant that is to South Africa, or anywhere else. The answer is that it is very relevant. During the period when domestic supply is shut down, America will look - temporarily - to alternative supply sources. In short, the US will attempt to alleviate it's local supply problems by sourcing international inventories. 5mbpd is a large amount of oil. The ripple effect in the world's oil markets is likely to produce waves of varying intensity that will impact on the resource sectors of various economies around the world.
It's foreseeable that as early as October this year, shortages that started in the USA may spread for a season to other heavy users of crude oil, including South Africa. Even if this does not happen in October, South Africa is on track to face more and more regular supply disruptions. The price of oil in the face of shortages in the US is certain to skyrocket again. Which begs the question: have we made any concessions, any changes to our lifestyles while we've had the chance - or do we need (collectively) a gun to our heads before we find more suitable, alternative living arrangements. I fear, as a society distracted, lazy and used to conveniences and contrivances, the answer will always be that collective change will happen when it is forced upon us. Our choices are wearing thinner by the day.
While the explanations for these shortages become more colorful (everything from lightning strikes to missing cyclinders, to inclement weather), the incontrovertible bottom line is that these shortages all have one thing in common: too many people, creating too many problems, with not enough resources to go round.
A simple metaphor for our problem is the traffic jam that each of us forms part of on the way to work. In South Africa there are daily traffic jams all across the country, from Johannesburg to Cape Town. Even Bloemfontein experiences gridlock. Jim Kunstler refers to the bottlenecking of resources in cities as a clusterfuck. Essentially what happens is the intense concentration of users causes so much congestion, paralysis insues. The system in effect becomes strained, and like a computer that has too many systems called up, it eventually hangs itself - it crashes.
Although we experience this on a daily basis, and we're aware of similar problems in the other big cities of the world. I have experienced the traffic firsthand in South Korea, where it may take as long as 9 hours to return from a weekend trip (covering 300km). Even with alternative transport, London's traffic is a nightmare. So too all of the world's larger cities.
In South Africa we are particularly depedent on cars and trucks to move stuff. The transport sector is 97 percent dependent on petroleum-based energy, with just 3 percent of transport energy coming from electricity. We import 60% of our fuel. More than 80% of freight is shifted on our highway system. Moreover, South Africa is one of the world's most energy intensive consuming countries - per capita - in the world, and the world's 11th top polluter per capita. Can South Africa continue to use fossil fuel resources the way we do? No. South Africa's supply shortage scenario might be a temporary glitch that we could sort out down the line - if it was a problem unique to South Africa. Many of us are well aware that most of the top countries in the world, principally the USA, China, Australia, Canada, Russia, Japan, Saudi Arabia, Japan, South Korea, Germany, the Netherlands and the United Kingdom are struggling with similar issues.
And indeed, if it seems we cannot continue consuming unabated, we are seeing a reversal (with 7000 vehicles and 2500 homes repossessed in Gauteng every month) in voracious demand.
So when the oil price sinks below $100 is this a reprieve from these repossessions? Are we offered an opportunity to once again consume as though there was no tomorrow? It would seem so, except that I predict oil prices are due to rocket upward beyond $147 starting now.
Many so-called experts have cited 'demand destruction' as the ultimate solution to keeping oil prices in check. This obviously ignores the reality of our common conundrum. And that is that whether here in South Africa, or on the highways of America, hundreds of millions of people are living a lifestyle, and part of arrangement that is oil addicted (fossil fuel dependent). And while higher prices can motivate us to make some discretionary choices, essentially we don't have any arrangements in place if, for example, petrol stations were to run dry tomorrow, or 5 years from now.
The situation in the USA's Gulf of Mexico post Gustav and Ike is that:
1) Fossil fuel reserves are at an 8 year low, America has a 21 day supply.
2) After Ike, America has lost 1-3 million barrels per day of refining capacity.
3) Shortages are already taking place in Louisianna and other southern States, and this is set to worsen over the next few weeks.
4) The Colonial Pipeline is down, America's biggest - moving 2.4million barrels per day
5) Total loss of production therefore is around 5mbpd.
America faces this decision now: do they hike gas prices to an unutterable $10 a gallon (and so limit hoarding) , do they keep prices 'reasonable' but ration motorists, or do they allow a free for all until it's all gone?
You might ask how relevant that is to South Africa, or anywhere else. The answer is that it is very relevant. During the period when domestic supply is shut down, America will look - temporarily - to alternative supply sources. In short, the US will attempt to alleviate it's local supply problems by sourcing international inventories. 5mbpd is a large amount of oil. The ripple effect in the world's oil markets is likely to produce waves of varying intensity that will impact on the resource sectors of various economies around the world.
It's foreseeable that as early as October this year, shortages that started in the USA may spread for a season to other heavy users of crude oil, including South Africa. Even if this does not happen in October, South Africa is on track to face more and more regular supply disruptions. The price of oil in the face of shortages in the US is certain to skyrocket again. Which begs the question: have we made any concessions, any changes to our lifestyles while we've had the chance - or do we need (collectively) a gun to our heads before we find more suitable, alternative living arrangements. I fear, as a society distracted, lazy and used to conveniences and contrivances, the answer will always be that collective change will happen when it is forced upon us. Our choices are wearing thinner by the day.
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