Saudis say “no need” for more oil expansion; global majority thinks oil running out

Interesting times for the peak oil debate.  Last week came the news that Russian oil had peaked: its Q1 oil production in 2008 fell, for the first time in a decade.  Later in the week, oil touched a new all-time high of $117 after Nigerian insurgents attacked a Shell pipeline there.

And today, the news emerges from Saudi Arabia that all future investment plans for increasing capacity have been put on hold: “in a series of statements, including one by the king himself, the kingdom has warned consumers it does not believe there is a need for further expansion”.  According to Carola Hoyos,

Abdullah Jum’ah, chief executive of Saudi Aramco, the kingdom’s oil company, said in a closed-door meeting with oil ministers and executives in Rome yesterday that market signals were “imperfect” and that there were uncertainties created by the move away from oil, the world’s worsening economic outlook and the recent turbulence in the financial markets, according to one person who took notes at the discussions.

But I’m still wondering whether the problem here isn’t simply that Saudi Arabia hasn’t got any spare capacity to give, whatever it says about downturns and the terrible unfairness of climate policy. 

Although we’re not quite at the point yet when you can talk about peak oil at conferences without feeling like a crank, you’d be amazed how many people think privately that the peak is pretty soon – including from governments and multilateral agencies.

Into the midst of this murky context sails a fascinating new survey from the always-good-value Program on International Policy Attitudes at the University of Maryland:

A new WorldPublicOpinion.org poll finds that majorities in 15 of 16 nations surveyed around the world think that oil is running out and governments should make a major effort to find new sources of energy. Most think that future oil prices will be much higher. Only 22 percent on average believe that “enough new oil will be found so that it can remain a primary source of energy for the foreseeable future.” Only in Nigeria does a majority (53%) endorse the view that governments can rely on oil in the long term.

Instead, an average of 70 percent takes the position that governments should assume that “oil is running out and it is necessary to make a major effort to replace oil as a primary source of energy.” The largest majorities endorsing this view are found in South Korea (97%), France (91%), Mexico (83%) and China (80%). The smallest are in Russia (53%) and India (54%), while in Nigeria only a minority (45%) holds this view.

 graphic

‘Course, you can rebut this in part by pointing out that (a) the two statements on which respondents were polled are slightly meaningless without dates, and (b) you can believe that enough oil will be found to satisfy demand by a given date while still believing that it’s “running out”; indeed, if you disagree with the second statement then you know something about geology that the rest of us don’t.  Still; you get the point.  Did someone say something about the wisdom of crowds?

Not shocked but stressed

In a recent post on Global Dashboard, I wrote about resilience, drawing on thinking that Alex and I have been developing together for a new project we hope to launch later this year.

The post was triggered by David Miliband’s argument that one of the defining features of the era we live in is a shift in the balance of responsibilities between state and citizen. It was a mistake to assume this would lead to greater stability, I argued. The key question is whether, when faced with a distributed threat, our systems become more resilient or less so.

Lloyd Anderson, head of science at the British Council and an ecologist, pointed out to me that it is helpful to think about three levels of influence on a system: trends, stresses and shocks.

Trends are gradual shifts in a system’s composition and context. Shocks are immediate and catastrophic. Stresses sit somewhere in the middle, and tend to affect a complex system in a particular way. Under pressure, the system ‘resists’ change up to an unpredictable point. It then shifts rapidly – and usually irreversibly – to another equilibrium.

We pay plenty of attention to shocks and trends. The former sell newspapers, while the latter keep social scientists in work. But stresses are deadly, both because they fly beneath the radar, and because they have the potential to lead to deep-seated changes that undermine the basis of our way of life.

Take two examples: the 2003 heat wave in Europe and the slow-burn insurgency in the Niger delta. (more…)

Oil now properly above $100 for first time

Yeah, yeah, it touched the $100 mark on January 2, but that was just a trader paying over the odds and making a loss in the process so that he had “the right to tell his grandchildren he was the one who did it”. Yesterday, though, the West Texas Intermediate price hit $101.32 – having been as low as $86.24 just a couple of weeks ago.

This is interesting, as a lot of hedge fund folk were betting heavily that with the US moving into downturn land, the oil price would ease too.  The International Energy Agency had also cut its demand forecast for the year.  So what’s the deal?  Chris Flood in the FT cites four factors:

– First, demand in emerging economies is proving to be the real engine here: as Paul Horsnell of Barclays Capital puts it, “Shorting oil on account of a negative view on the US economy is always very dangerous and likely to backfire, because global oil demand growth is centered on emerging markets”.

– Second, there are ongoing supply disruptions in places like Nigeria and the North Sea; the supply outlook remains very tight.

– Third, a lot of investor inflows are arriving in the oil sector, seeking fairer climes than are currently available in credit and equity markets.

– And finally, there’s the OPEC factor. At its January meeting, it left production levels unchanged, ignoring calls to increase supplies, including from President Bush himself.  Now, there’s speculation that OPEC supply might even be cut

Various commentaries are wondering whether OPEC’s now actively planning to keep the price above $80.  I’m wondering whether OPEC simply doesn’t have any more production capacity to give…

On love, hate and the internet’s capacity to amplify both

[youtube:http://www.youtube.com/watch?v=Xe1TZaElTAs]

Here’s an excellent video with which to while away the next nine minutes and thirteen seconds.  The speaker is Clay Shirky, an American writer on the social effects of internet technologies.  He says:

What is happening in our generation is that we have a set of tools for aggregating things that people care about, in ways that increase both the scope and the longevity [of their efforts] – in ways that were unpredictable even a decade ago.  The coordinating tools we now have – and I’m not talking about anything fancy, I’m talking about mailing lists, usenet, weblogs and wikis  – those tools turn love into a renewable building material.

As an example, Shirky cites the case of Linux – which “gets rebuilt every night by people whose principal goal is that it continue to exist the following morning”.  Now, he continues, we’re just starting to explore the social application of these tools, and “it [means] that the ability to aggregtate non-financial motivations – to get people together outside of managerial culture and for reasons other than the profit motive – has received a huge comparative advantage.”  So what started with small, techie undertakings like Linux is now exploding:

That pattern – of aggregating caring into something stable and long-lasting – is going everywhere.  Wikipedia.  The anti-anti-immigration protests in Californian schools, that were co-ordinated through MySpace.  The monitoring of Nigerian elections by a loose collection of people using SMS and camera phones to watch their own elected officials. The use of Flickr to co-ordinate information and disaster relief after the Indian ocean tsunami, after the London transit bombings, after the Madrid bombings.  And the number of places where that pattern will go in the future is much greater than the number of places that pattern has already gone.

We have always loved one another; we’re human, it’s something we’re good at.  But up until recently, the radius and half-life of that affection has been quite limited.  With love alone, you can get a birthday party together. Add the co-ordinating tools – and you can write an operating system.  In the past we would do little things for love, but big things- big things required money.  Now, we can do big things for love.

Of course, the catch is that the very same tools also mean that you can do big things for hate or fear, as Shirky himself says elsewhere.  Shirky has a new book about to come out in a few weeks’ time, under the title Here Comes Everybody: a book that’s “about what happens when people are given the tools to do things together, without needing traditional organizational structures”.  He continues:

Here Comes Everybody is about why new social tools matter for society. It is a non-techie book for the general reader (the letters TCP IP appear nowhere in that order). It is also post-utopian (I assume that the coming changes are both good and bad) and written from the point of view I have adopted from my students, namely that the internet is now boring, and the key question is what we are going to do with it.

Important stuff, this – c.f. the extraordinary protests in Colombia if you haven’t already.  As the IHT put it:

A young Colombian engineer used the social networking site last week to organize a massive protest against the Revolutionary Armed Forces, known as FARC. On Feb. 4, millions of Colombians marched simultaneously in 27 cities throughout the country and 104 major cities around the world shouting “No more kidnappings! No more lies! No more deaths! No more FARC!”

The idea of the protest was born a month ago, Oscar Morales, the organizer, said. “I thought it was going to be something unimportant, but little by little it became a big mobilization,” said Morales, 33. “Thanks to Facebook, we have created an exponential effect.” Morales started a Facebook group called “A million voices against the FARC” as a virtual protest with his friends. He got an enormous response from other Facebook users, so Morales decided to call for a national march. Colombians living abroad also learned about the protest through Facebook. Expatriates wanting to participate in the event contacted Morales by e-mail. After receiving hundreds of expressions of interest, Morales decided to turn the national march into an international event.

Update: just discovered a terrific article by the New Yorker’s George Packer on ‘Iraq the place versus Iraq the abstraction’, which shows how participatory communication technologies can also contribute to the opposite of what Shirky’s talking about above, i.e. disorder rather than coherence.  See Global Dashboard post on that here.