Friday, April 11, 2008

Peak Oil - The First Shortages?

This sad little nethoax chain letter - urging consumers to boycott Exxon Mobile - is once again making the rounds of the Kwaku Net. Assuming folks deigned to act on what this letter enjoins, their action would prove absolutely meaningless. Instead of engaging in impotent symbolic gestures signifying nothing, the meaningful thing to do is to begin preparing to the best of your ability to hunker down, conserve, and to cooperate with others in your community for the cold, hard rain that is certain to come. This is for your personal and communal benefit no matter what. So do it!

No time like the present. As for trying to auger the timing of the clampdown, here is the one sure indicator by which you can ascertain when things will begin to tighten up in earnest.

Fuel prices alone are unlikely to bring America to its senses.
It clearly will take outright shortages with lines at the pumps, curtailed deliveries and many other misfortunes before serious measures to deal with declining oil supplies –- speed limits, rationing, mandatory car pools, improved mass transit -- are taken. Thus the question becomes: how soon?

Gasoline and diesel are two different animals in America. Most gasoline is used for personal travel and much of that for convenience and, as we shall find out shortly, is not essential to the economy. Diesel in America is, for the most part, an essential fuel in that it is used to perform money-making work or, in its heating oil form, keep us from freezing. If diesel becomes too expensive, and those expenses cannot be passed on, then the consumption of diesel will be cut back. This in fact is already happening -- the government is reporting that distillate consumption of diesel and heating oil currently is down by 3.1 percent as compared to the same four week period last year. This is undoubtedly due to the price of diesel and heating oil which is now around $4 a gallon, an increase of $1.17 a gallon since last year.

The word “distillates” encompasses both diesel and heating oil which are about the same thing; except that the clean air rules in the U.S. require most of the sulfur be removed before burning it in a motor. Currently there is a world-wide shortage of distillates which is most severe in China where long lines of trucks waiting for fuel are appearing across the country.
So watch what's going on in the diesel and distillates market. Diesel is the lifeblood of our current unsustainable level of consumption. As goes the diesel, so goes our way of life.