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Page added on July 29, 2009

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Greenpeace report reckons we’ve hit peak oil (sort of)

If, in the runup to Copenhagen, you have a sneaking suspicion that world leaders might still be more attached to the realpolitik of energy than the green-tinged adoption of strong climate policy, a new report from Greenpeace, Platform and Oil Change International may provide a glimmer of hope.

The suspicion is that whatever grand statements are made by the Obamas, the Lulas or the Browns of the world as they thrash out their meta-climate policy at Copenhagen, for the moment they’re going to remain much more motivated by ‘energy security’ than greenhouse gas stabilization.
It’s gradually dawning on policymakers that cutting oil use might just make sense. By bringing in mandatory vehicle efficiency standards similar to those found in Europe, for example, the US could cut its daily use of oil by 10 million barrels. Very bluntly, politicians and the US public are starting to ask whether they’d rather have slightly smaller cars, or dead American soldiers being flown back in from some future Iraq. And this is a new, and welcome way of seeing the politics on energy – because it has the potential to destroy the whole ‘oil gets more expensive therefore we exploit tar sands’ dynamic.

How? Well, we may have hit peak oil. Peak oil demand, that is. The chief executive of BP, Tony Hayward, said recently that “BP is unlikely to sell more gasoline ever in the United States …than it sold in the first half of 2008.” This isn’t because the stuff is stopping coming out of the ground, but rather because the oil companies are anticipating a major efficiency drive from the US government, and a subsequent drop in demand for oil.

This in turn means that certainty about a relatively predictable, rising oil price – the kind of certainty that makes it worth spending billions on building tar sands infrastructure – can’t really be taken for granted any more. And it’s not just the US – China is busy implementing aggressive efficiency standards, and why wouldn’t the rest of the world follow suit, as resources become harder to secure, stricter environmental legislations are imposed, and climate change restrictions lurk in the future? Today BP announced that their profits this quarter compared to last year were down by about 50%. They say it’s due to the falling and increasingly volatile oil price – which means it’s getting too difficult to figure out what’s worth investing in. A big contributing factor to this volatility is the belief that we’re going to see some tough climate legislation in the near future. BP also say they’re just seeing reduced demand for oil.

Greenpeace



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