The last thing I did before I went to bed was glance through October 26's Financial Mail article (we get them a day before everyone else) that I'd left specifically on my pillow. The article was on page 75, UP TO NO GOOD; a feature on oil prices. I know I talk a lot about Peak Oil. I'm used to people saying I'm being 'negative' or 'pessimistic' or 'doomsaying'. It's reassuring in a way to hear this, because people aren't dumb, and if they need further convincing, it must mean there's a lot of contradictory evidence out there. Believe me, I'd love to be wrong. It will be better for you, me, everyone.
This is why this article on oil prices was a tremendous shock. The pull quote is from Barclays Capital: 'The course is set for the market to take out US$90, &100 and $110 in fairly quick succession.' They see a $300 price happening overnight if the US attacks Iran. $300 a barrel is essentially R27 per litre of petrol.
The same article shows how rapidly things have changed. Between 1970 and August of this year, says the article, oil prices average $32/bbl. In the 1985 to 2003 period, 'they breached $30/bbl only once.' The article assers that 'real acceleration started in 2003.
The good news is, although South Africa is not immune to these energy changes, we are far more so than say the USA, Australia and the United Kingdom. We also have SASOL, which ameliorates our exposure somewhat, and fantastic amounts of coal. But before we start opening up the champaigne, it's prudent to note that many other countires are less fortunate, and will jealousy look on as we get a party styarted, and their's come to an absolute dead end. What is to prevent the US, for example, from annexing our resources, as it has in Iraq. I should qualify that though. For now the US has just, as Jim Kunstler puts it, built a large police station in Iraq to 'protect and ensure access to oil'.
Meanwhil a $1 Brent crude price change translates, the article goes on, to a 6c change. Not a lot at small increments, but these are starting to add up now. You can feel it in food prices, in the energy bill, and soon, we'll see air travel start to feedback these costs and many other industries.
Kak
What really burst my bubble though, late last night, was reading about Jeremy Wakeford of ASPO - yes, this bunch of alarmists and fringe soap box broadcasters are now making it into mainstream magazines. My Peak Oil article in HEARTLAND was published almost 18 months ago (I may get paid for all that this month), and although some people raised an eyebrow, most - including my dad - were dismissive. And then there was this front page headline in the UK paper; The Independent. But to see even the likes of Peak Oil's mascot, M King Hubbert quoted in this magazine, and the admission that oil is a 'finite reserve', I don't know...I felt chills. Because it means we are there. And that means kak.
Crunch
Wakeford puts the post-Peak depletion rate (the total amount of oil supplied to the world after peak) at a 3% year on year decline. Consensus has been coming in from all over - believe me, I have trawled the web - that we're right at, or just past Peak. Some writers feel we hit peak last year. Meanwhile the International Energy Agency forecasts boldly that we'll go to 88 million barrels oil supply a day (worldwide). It seems as though world oil supplies weren't able to go over 85 last year. We're already down from that figure. So what we're essentially seeing, is Crunch Time.
The Dream
But let me share the dream I had. I was driving in my car along a seaside, and was attempting to turn up a road that climbed along a series of steep cliffs. Except, the road had fallen into the sea. I slowed down, and parked on the side of the road, my car immediately getting stuck in thick beach sand.
I followed a flock of people who were enjoying the new coastline. Their children were boogey boarding in impressive surf. I watched from the rocky edge, with the parents. I admired the courage of these children, because some of the waves were truly monsters. It made me get a sense of the incredible potential of our species; that small children had the strength to battle and swim and have fun in the powerful muscles of bending seawater.
But then something happened. The waves got a little bigger, and the kids decided to come in. The problem was, because the shore was a jagged edge, it wasn't a matter of just strolling onto the beach. Once again I was impressed that the kids were able to control their motion as a giant wave rolled towards the cliffs, them crumbled to roiling foam. I watched them grope for purchase. They came close, but then sank down into the churning waters.
Even in my dream I remembered: "I'm an excellent swimmer", and I've swum between rocks and breakers before. The thought flickered through my mind to 'save them', except, as I saw them struggling now, descending again and again under the bending ribs of blue then snowy water, that it was impossible in such a powerful sea. And that's where it ended; with these enormous waved filled with children, rising up higher and higher, breaking and chisseling against the cliffs we were standing on, while the children in them fought for air. It was a battle you implicitly knew they would lose.
And then I woke up.
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