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Wednesday, February 1, 2012

Peak Oil’s Economic Pain Is Trumps

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Oil’s tipping point has passed, and the economic pain of a flattening supply will trump the environment as a reason to curb the use of fossil fuels, say James Murray and David King, in an article just published in the prestigious journal Nature.

James Murray was founding director of the University of Washington’s Program on Climate Change. David King is director of the Smith School of Enterprise and the Environment, University of Oxford,. He served as chief scientific adviser to the UK government in 2000–07.

These two distinguished scientists have confirmed what many peak oil pundits have been saying for years. Nevertheless publication in the Nature journal will garner much attention.

the main points made in the article are…

  • Peak oil is a more persuasive argument for lowering emissions due to the more immediate and severe impact on the economy
  • 2005 was a tipping point. Crude oil production has not risen to match increasing demand leading to wild price swings

  • Crude oil production has not risen to match increasing demand leading to wild price swings

  • Oil price spikes caused economic crises and contributed to the one that world is “recovering” from now
  • The future economy is unlikely to bear what oil prices have in store
  • Only by moving away from fossil fuels can we ensure a more robust economic outlook and address the challenges of climate change
  • This will be a decades-long transformation that needs to start immediately
  • We are not running out of oil but we are running out of world that can be produced cheaply
  • Non-conventional oil won't make up the difference
  • It wasn't just the "credit crunch" that triggered the 2008 recession, but the rarely talked about oil price crunch as well
  • Historically there is a tight link between oil production and global economic growth.
  • If oil production can't grow, neither can the economy
  • Climate change has driven only slow policy responses, but peak oil engendered economic consequences will drive shorter term action
  • Governments that fail to plan for a decline in oil production will face severe economic consequences well before catastrophic climate change
  • The response from governments must be greater efficiency and conservation with policies such as -
  1. higher taxes on oil
  2. lower speed limits
  3. encourage public transport
  4. redirecting tax credits to renewable energy


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