Category Archives: Peak Oil

What happens after the gold rush?

Peak Oil: Volvo Calls It

This is from Perth, Oz – the reality from the Volvo guy is remarkable – he admits we’re never gonna make the transition to cars with different energy sources, but he does forget that even if we did, that we use oil in making the actual car, not just burning it in the engine.  If it’s too expensive to burn, then it’s too expensive to make whole cars…..

Demand for oil to outstrip supply within two years

  • Paul Syvret
  • From: The Courier-Mail

RISING oil prices pose a grave threat to global economic recovery, according to some experts.

“The fear has been expressed by the US military and by the automobile industry.

This week in Perth, Volvo’s head of product planning, Lex Kerssemakers, said “we all know that oil is running out”.

“We need to find alternative solutions and though we are aware of the alternatives – LPG, CNG, ethanol, electric and so on – we have to introduce these to the market,” he said.

“If we don’t do it now, we won’t be ready in five years when oil may be prohibitively expensive.”

Mr Kerssemakers said Volvo would have an electric car on the world market in 2012 that would use less than 1.5 litres/100km of fuel – about one-tenth of that used by a current V8-engined sedan.


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Peak Oil:Governments Starting to Worry

This is a great overview of the recent activity surrounding peak oil acknowledgment…study the graph by the US Energy Agency, it’s astounding……


By Chris Nelder

In the first part of this series, I reviewed a series of reports from March supporting the peak oil view, and warning that world oil production very well may go into terminal decline by 2015 or sooner.

The sources included the UK Industry Task Force on Peak Oil and Energy Security and officials within the British government; researchers within the College of Engineering and Petroleum at Kuwait University; researchers from Oxford University; and ConocoPhillips (COP), the third-largest oil company in the U.S.

On March 25, the U.S. Department of Energy (DoE) joined the officially worried, with a report in French newspaper Le Monde titled “Washington considers a decline of world oil production as of 2011.

The author had pestered Glen Sweetnam, director of the International, Economic and Greenhouse Gas division of the Energy Information Agency (EIA), for details about a presentation he had given at a semi-public DoE round-table with oil economists in April 2009. How he got wind of it, I don’t know, but I admire his persistence.

The zinger was this chart:

worlds liquid fuels supply
Source: Glen Sweetnam, “Meeting the World’s Demand for Liquid Fuels – A Roundtable Discussion,” EIA 2009 Energy Conference, April 7, 2009, Washington, DC

The implication was obvious: The EIA has no idea how production could increase after 2012. In the absence of these “unidentified projects,” they expect global oil supply to decline by about 2% per year – from 87 million barrels per day (mbpd) in 2011 to 80 mbpd by 2015 – while demand rises to 90 mbpd.

Within five years, then, there will be a 10 mbpd gap between supply and demand—roughly a Saudi Arabia’s worth of production (currently 10.8 mbpd).

(I should note that although Sweetnam’s chart gives the EIA’s Annual Energy Outlook 2009 as the source, I found no such chart, nor even the data that might produce it, in my copy of that publication. I am unable to explain that discrepancy.)

The agency officially continues to lay any concerns about future supply at the feet of insufficient investment. In Sweetnam’s interview with Le Monde, he put it this way: “‘a chance exists that we may experience a decline’ of world liquid fuels production between 2011 and 2015 ‘if the investment is not there.'”

It’s a weak position to take in the wake of the oil price blow-off of 2008. The world’s developed economies simply cannot tolerate the high prices that would entice that investment (see “‘Peak Oil Demand,’ Yes… But Not the Nice Kind“), and I’m sure the EIA knows it.

You’d think the American media would have been all over the story, as it signaled a major about-face in the official U.S. position on peak oil. As recently as 2008, the EIA’s base case scenario was for oil supply to rise through 2030, and not decline until 2090!

Yet five days later when I Googled it, there was not one story from a major domestic publication. Only blogs and the usual peak oil sites had picked it up.

In my seasoned judgment, the American media blackout is deliberate.

And speaking of media blackouts…

Media Blackout at the World’s Biggest Energy Forum

On March 30-31, the biennial International Energy Forum (IEF) summit took place in Cancun. Attendees at the world’s largest energy forum included ministers from 64 countries, members of the IEA and OPEC, and other dignitaries.

In parallel, Cancun also hosted the International Energy Business Forum, attended by some 36 companies including the top executives of China National Petroleum Corp (CNPC), ExxonMobil (XOM) and Royal Dutch Shell (RDS.A).

In short, the twin conferences were a Very Big Deal.

But when I searched Google News for stories containing the exact phrase “International Energy Forum” and published during the conference, it wasn’t until the seventh page of results that I found any stories from major American media outlets, and those stories were strictly focused on specific issues like oil and gas prices. They said not a word about peak oil.

A journalist from the oil and gas media organization Platts explained what happened on his blog. All media were barred from the IEF conference room, and exiled to a press room where the presentations were shown on monitors with no sound. When reporters asked for sound, the monitors were turned off. All sessions were then declared to be private, and the reporters that had come from around the globe to cover the conference were simply shut out.

According to journalist Matthew Wild, the presentations included one from PFC Energy titled “Unpacking Uncertainty: Investment Issues in the Petroleum Sector.”

The document reviews three forecasts for oil supply: The IEA’s, which shows it reaching 109 mbpd by 2030; OPEC’s, which expects it to reach 111 mbpd; and PFC’s own, which expects supply to peak around 2020-2025 at 95 mbpd, then decline to 90 mbpd by 2030.

Although it sees the decline of mature fields proceeding at a slower rate than the IEA, PFC Energy still believes it will be “rapid enough to produce a world energy picture that differs vastly from previous long-range energy assessments,” and goes on to explain:

This is not a world of “peak oil” where global hydrocarbon potential is exhausted, but rather of peak production, where the petroleum industry’s ability to continue to increase-or even maintain-production of conventional oil (and eventually gas) is constrained. Exploitation of unconventional oil will provide additional liquids, but in all probability only at increasingly higher costs, and it will depend on significant investments to develop appropriate technologies to convert today’s resources into tomorrow’s reserves.

The exact timing of both the plateau and onset of irreversible decline will be influenced by the factors that determine long-term changes in supply and demand. Nevertheless, the challenge is coming, and this emerging world of limited conventional production will require major adjustments on the part of both consumers and producers.

The phrasing of the first statement is curious. Serious observers know that “peak oil” has never meant the exhaustion of hydrocarbon potential, and has always meant the peak of production flow rates. I covered a presentation by Michael Rodgers of PFC Energy at last year’s peak oil conference, so I must believe that PFC Energy knows better than to characterize peak oil that way and simply chose to do so for the appeasement of its IEF audience.

In any case, we now know that the world’s top energy ministers have seen a serious presentation on peak oil, and heard the warning about its seriousness, albeit a somewhat soft-pedaled one.

Most reports on the conference featured the theme that better data and transparency on reserves reporting is needed – a bell that peak oil mavens like Colin Campbell have been ringing for over a decade. Without it, the world is in the dark about the true future of oil supply.

To reinforce that point, IEA head Nobuo Tanaka told the Financial Times at the conference that it has invited China to join the IEA because global oil demand has shifted to the East. “Our relevance is under question,” he worried, as the opacity of data on Chinese oil demand and inventory threatens to blind the agency to the true state of the world’s oil markets.

Another key theme was an evident widespread concern about the volatility of oil prices. By the end of the conference, IEA, OPEC, and the IEF were expected to announce a “joint action plan” to control volatility and ensure that prices remain stable enough to encourage new production.

While the IEF was under way, the chairman of the Intercontinental Exchange (ICE) told Reuters that blaming speculators for price spikes was a “crutch” used to avoid looking at the realities of oil supply and demand. As I explained in July 2009, traders have turned to the ICE to skirt the stricter position limits on the NYMEX. The Commodity Futures Trading Commission (CFTC) has now proposed new regulations to limit the influence of speculators in the energy markets, which are up for public comment until April 26.

You (Still) Can’t Handle the Truth

By any measure, March was a watershed month for the truth about peak oil.

Estimates on the timing of the peak have narrowed dramatically, and now center on the 2012-2015 time frame. The range of estimates on the peak rate of production remain a bit broader and shrouded in caveats, but they are rapidly drawing closer to 90 mbpd. And the globally averaged, post-peak annual decline rates are settling in around 2%.

In other words, industry and governments appear to be coming around to what my call has been all along: 2012, at 90 mbpd or less, then declining at about 2.5% per year.

Now we know that the oil and gas industry, as well as the world’s governments, are not only aware of the peak oil threat… they too are deeply worried about it.

Worried enough to huddle behind closed doors, away from the press. Worried enough to formulate plans to control price volatility. Worried enough to agitate for more transparent data. Worried enough to begin planning for a future of relentlessly declining energy.


About the author: Energy and Capital
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Energy is such a pervasive resource that it affects every single human endeavor. Energy has become fundamental to the very basic functions of contemporary civilization. And it is imperative to the future growth, prosperity, social stability and security of nations around the world. Without… More

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Peak Oil: Our Economy Cant Take It

Just read this and see if the economic implications dont sound pretty real – and this is from one year ago…when oil was much cheaper…


“The Global Crisis Is Really About a 140-dollar Barrel of Oil”
Chris Arsenault interviews economist JEFF RUBIN

From InterPress Service
VANCOUVER, Jun 15, 2009 (IPS)

Sitting in the restaurant of Vancouver’s posh Fairmount Waterfront Hotel, the former chief economist for one of Canada’s largest banks doesn’t seem like the typical apocalyptic peak oil theorist.

But in his new book, “Why Your World is About to Get a Whole Lot Smaller”, Jeff Rubin argues that globalisation, fuelled by cheap oil, is finished. In the book, Rubin contends the current global recession is a result of expensive oil, rather than subprime mortgages in the U.S.

Frequently ranked as Canada’s top economist, Rubin predicts that one barrel of oil will cost 225 dollars by 2012. Other analysts consider that number outlandish; the conservative National Post newspaper, where he was frequently quoted as an economic expert before leaving his job at CIBC World Markets, accuses him of “anti-materialism” and “Big oil paranoia.”

But in 2000, Rubin correctly predicted that oil would top 50 dollars per barrel by 2005. And, in 2005 he got it right again, forecasting prices would top 100 dollars per barrel in 2007.

Rubin sat down with IPS at his hotel after giving a lunch address to the Vancouver Board of Trade.

IPS: If Iraq’s security situation improves, and its cheap oil comes back online for export, could that stop your prediction of 225 dollars per barrel by 2012?

Jeff Rubin: Not even close. Nor would it stop the prediction that exports from OPEC (the Organisation of Petroleum Exporting Countries), instead of growing, are likely to fall by about one to one and a half million barrels per day over the next four or five years.

It’s not just about depletion [of OPEC oil fields], though depletion is playing a key role. It is also about the explosive growth of oil consumption in OPEC countries themselves. This is the reason why exports have not grown from OPEC in the last five years; they are in effect cannibalising their own exports.

IPS: If the world economy can function with oil at 140 dollars a barrel, are there not huge reserves of unconventional petroleum – oil shale in Utah, heavy oil in Venezuela’s Orinoco belt and deep offshore deposits – that become viable to exploit?

JR: What happened to the world economy when oil hit 140 dollars? Is this deepest recession in the post-war period really about the U.S. subprime mortgage market? Or is it about 140-dollar a barrel oil? I’d argue it is about a 140-dollar barrel of oil.

What blew up Jeff Rubin’s bonus last year? That was about [subprime mortgages in] Cleveland. But blowing up Jeff Rubin’s bonus and blowing up global GDP are two very different gigs.

IPS: At what point does the price of oil make export-driven globalisation untenable?

JR: The model as we know it peaked in 2007. If we measure globalisation by the percentage of world GDP that is an export or an import, 2007 will mark the peak of a past age.

You are going to see less and less container ships. All of those containers are about one thing: a wage arc. Moving your factory from someplace where you pay folks 30 bucks an hour to somewhere where you pay folks 30 bucks a week is great, if it’s just about wages.

But what moves those container ships is oil. At 150-200 dollars per barrel, the wage arc becomes pennywise and a pound foolish because what you save on a wage bill you more than spend on bunker fuel.

IPS: Some analysts estimate that 25 percent of the world’s hydrocarbons are located in the Arctic and will soon be open to exploitation due to, ironically, global warming.

JR: The stuff in the Arctic is a drop in the bucket. You are losing sight of what the Cambridge Energy Research Associates and Exxon don’t tell you about. They hold big press conferences to talk about ‘oh we just discovered the Jack Field – 10,000 feet under the hurricane ravaged waters of the Gulf of Mexico, isn’t that fantastic’.

They don’t hold press conferences [to announce] ‘see this field here? It has been producing for 50 years. It’s about to run dry.’

Every year we lose four million barrels a day [of production due to depletion]. Over the next five years, we are going to have to find 20 million barrels a day of new production, just so that we can [continue to] consume what we consume today.

IPS: Even if you are correct that supplies of cheap oil are dwindling, couldn’t increased efficiency make up for shortfalls in production?

JR: We think that efficiency leads to conservation but history has shown that is not what happens.

The average engine today is 30 percent more efficient than the engines produced before the OPEC oil shocks [of the 1970s]. Yet, the average [North American] vehicle consumes just as much gasoline in the course of a year.

Back in the 1970s, we [North Americans] used to drive about 9,000 miles a year, now we drive 12,000. Back in the 1970s, we weren’t living in the far-flung suburbs. All those gains in efficiency have led us to, ever more efficiently, consume more and more oil.

IPS: What do you think is a bigger threat, peak oil or peak water?

JR: Peak water is a whole other ballgame. But let me tell you a place where peak oil and peak water intersect: the Canadian oil sands. To produce one barrel of synthetic oil, you have to burn 1,400 cubic feet of natural gas, schlep two tonnes of sand [and] pollute 250 gallons of water.

Just like carbon emissions, water is free. If you are an oil sands operator and you pollute 250 gallons of water, it is costless.

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Peak Oil: US Military says it’s happening

I scooped this report 2 months ago but now it’s in the mainstream….folks, this is happening but we aren’t hearing anything locally are we?  But I’m sure it wont be long before the Repubs at least tell us it’s happening – cause they believe everything the military says….

US military warns oil output may dip causing massive shortages by 2015

• Shortfall could reach 10m barrels a day, report says
• Cost of crude oil is predicted to top $100 a barrel

  • Terry Macalister
  • Surplus oil production capacity could disappear by 2012 a report from US Joint Forces Command, says. 

     The US military has warned that surplus oil production capacity could disappear within two years and there could be serious shortages by 2015 with a significant economic and political impact.

    The energy crisis outlined in a Joint Operating Environment report from the US Joint Forces Command, comes as the price of petrol in Britain reaches record levels and the cost of crude is predicted to soon top $100 a barrel.

    “By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day,” says the report, which has a foreword by a senior commander, General James N Mattis.

    It adds: “While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds. Such an economic slowdown would exacerbate other unresolved tensions, push fragile and failing states further down the path toward collapse, and perhaps have serious economic impact on both China and India.”

    The US military says its views cannot be taken as US government policy but admits they are meant to provide the Joint Forces with “an intellectual foundation upon which we will construct the concept to guide out future force developments.”

    The warning is the latest in a series from around the world that has turned peak oil – the moment when demand exceeds supply – from a distant threat to a more immediate risk.

    The Wicks Review on UK energy policy published last summer effectively dismissed fears but Lord Hunt, the British energy minister, met concerned industrialists two weeks ago in a sign that it is rapidly changing its mind on the seriousness of the issue.

    The Paris-based International Energy Agency remains confident that there is no short-term risk of oil shortages but privately some senior officials have admitted there is considerable disagreement internally about this upbeat stance.

    Future fuel supplies are of acute importance to the US army because it is believed to be the biggest single user of petrol in the world. BP chief executive, Tony Hayward, said recently that there was little chance of crude from the carbon-heavy Canadian tar sands being banned in America because the US military like to have local supplies rather than rely on the politically unstable Middle East.

    But there are signs that the US Department of Energy might also be changing its stance on peak oil. In a recent interview with French newspaper, Le Monde, Glen Sweetnam, main oil adviser to the Obama administration, admitted that “a chance exists that we may experience a decline” of world liquid fuels production between 2011 and 2015 if the investment was not forthcoming.

    Lionel Badal, a post-graduate student at Kings College, London, who has been researching peak oil theories, said the review by the American military moves the debate on.

    “It’s surprising to see that the US Army, unlike the US Department of Energy, publicly warns of major oil shortages in the near-term. Now it could be interesting to know on which study the information is based on,” he said.

     “The Energy Information Administration (of the department of energy) has been saying for years that Peak Oil was “decades away”. In light of the report from the US Joint Forces Command, is the EIA still confident of its previous highly optimistic conclusions?”

    The Joint Operating Environment report paints a bleak picture of what can happen on occasions when there is serious economic upheaval. “One should not forget that the Great Depression spawned a number of totalitarian regimes that sought economic prosperity for their nations by ruthless conquest,” it points out.

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    Who Said It?

    “Our country’s leaders have three main choices: Taking over someone else’s oil fields until they are depleted; carrying on until the lights go out and Americans are freezing in the dark; or changing our life style by energy conservation while heavily investing in alternative energy sources at higher costs.” Continue reading

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    Peak Oil: China Is Thirsty

    Less than 5 years ago we thought that China wouldnt overtake us in car sales until at least 2020.    In early 2010 they already have.  See how mainstream economic predictions go?  Now there are hundreds of millions of Chinese who want to live like us.  Our problem is this – their incomes are on the way up -ours on the way down,  Increasing oil prices for them arent  that bad a thing – never having had to pay too much because they never had that much.  Its bad for us though….

    China passenger car sales up 63 pct in Mar, sales up 76 percent in first quarter


    • Elaine Kurtenbach, AP Business Writer, On Friday April 9, 2010, 8:44 am EDT

    SHANGHAI (AP) — China’s passenger car sales jumped 63 percent in March from a year earlier as manufacturers scrambled to meet strong demand driven by tax cuts and government subsidies, a state-affiliated industry group reported Friday.

    Passenger car sales rose to 1.26 million vehicles in March, according to the China Association of Automobile Manufacturers.

    The figures show sustained growth for automakers in a market that bounced back from a slowdown in late 2008-2009 as the government pumped hundreds of billions of dollars into economic stimulus.

    Weak sales in the United States and a surge in car purchases by newly affluent Chinese buyers helped to make this the world’s largest auto market last year, when total vehicle sales jumped 45 percent over 2008 to 13.6 million units.

    The U.S. market is recovering but cannot match growth in China, where many are still buying their first cars. Demand for bigger cars is growing as families that bought small cars the first time trade up to better, larger vehicles.

    Sales in the U.S. climbed 24 percent in March compared to the same month a year earlier, according to figures compiled by AutoData Corp. China’s auto industry does not release comparable monthly sales data adjusted for annual rates.

    The Chinese industry group said total vehicle sales rose 56 percent in March from a year earlier to 1.7 million units, bringing sales for the first three months of the year to 4.6 million.

    “Passenger car sales turned out to be even better than earlier market estimates,” said Rao Da, general secretary of another industry group, the Shanghai-based China Passenger Car Association, which released separate data showing similar trends.

    “We are confident that China’s vehicle sales will surpass 17 million units this year, growing by about 25 percent,” he said.

    China’s searing growth has buoyed foreign automakers like General Motors Co. and Toyoto Motor Corp. as they weather languid sales in their saturated home markets.

    GM reported earlier that its sales in China jumped 68 percent in March over a year earlier to a new monthly record of 230,048 vehicles. First quarter sales surged 71 percent to 623,546 units.

    Ford Motor Co. said first quarter sales jumped 84 percent to a record 153,362 units.

    Toyota Motor Corp.’s sales in China rose 33 percent in March from a year earlier to 61,200 units, lagging the market and its rivals but still growing despite its massive recall problems in other markets.

    China’s domestic automakers, who tend not to release sales data on as regular a basis, are also generally enjoying strong growth, and running double shifts to meet demand.

    Production of passenger cars rose 72 percent from a year earlier in March, to 1.3 million units, the CAAM reported. First quarter output rose 84 percent to 3.5 million units.

    It said sales of vehicles with engines of 1.6 liters or less totalled 868,300, accounting for 69 percent of total passenger car sales.

    Exports of fully assembled vehicles in March jumped 78 percent from the year before to 39,500 units, suggesting a recovery in auto exports, it said.

    Chinese automakers slowed production in late 2008 and early 2009 as global economic woes dragged sales sharply lower. By mid-year, car factories were struggling to keep up with reviving demand thanks to government rescue measures and China’s economic recovery.

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    Peak Oil: Watch Venezuela Closely

    This is how interdependent we are on the rest of the world – and most Americans dont want to even acknowledge it

    The Peak Oil Crisis: Countdown at the Guri

    By Tom Whipple   
    Wednesday, April 07 2010 11:40
    Most Americans have never heard of Venezuela’s great Guri dam. Completed in 1978 with 20 generators and 10,200 MW of generating capacity, at one time it had the most generating capacity of any hydro dam in the world.By way of comparison, the Three Gorges dam in China is to produce 22,500 MW when completed next year and the U.S.’s Grande Coulee which dates back to 1942 can produce 6,800 MW. If you disregard the ecological damage caused by great dams, they can be wonderful things for they produce prodigious amounts of emissions-free energy at very low cost — provided, of course, it keeps raining in the dam’s watershed. Until recently nobody gave this much thought until last summer when El Niño, and perhaps a touch of global warming, started doing funny things to Venezuela’s weather.The rainy season in Venezuela which refills the reservoirs runs from June to October. The summer of 2009 it was a catastrophe. Rainfall was only about one third of normal so that by last fall alarm bells began sounding as it looked as if the water could fall to the level where the dam would have to shut down most of its generating capacity. The Guri dam has a lower and older generating hall with much less capacity than the main hall and there are two smaller dams located downstream from the Guri. The problem is that if they have to stop letting water through to the turbines in the main Guri dam, the water is no longer available to the downstream plants so their output drops markedly too.

    Now, if you are wondering why a falling water level in the Venezuelan highlands should be if interest to Americans, the answer is easy. Despite years of political tensions between the Chavez government and Washington, the U.S. is still importing some 800,000 barrels a day of crude from Venezuela. Should these imports go away, it is likely to come suddenly – shipping oil from Venezuela to Louisiana only takes two days — we are going to see an instantaneous jump in gasoline prices. Given that the U.S. is at the top of President Chavez’s least favorite countries list, it does not take much imagination to figure out who would be shut off first if exports have to be curtailed.

    The length of any shutdown would be dependent on rainfall in the Guri’s watershed. This week 600 m3 of water per second is flowing into the Guri reservoir and 4300 m3 per second are being released to generate power at the Guri and downstream dams. At the height of the summer rainy season, up to 12,000 m3 /second can flow into the Guri reservoir. However, unless heavy rains begin in the next six weeks or so, much of the dam’s power production will have to be shut down somewhere around the end of May.

    If this happens, the Chavez government will have a very serious problem. The country has already been enduring rolling blackouts for months in an effort to reduce electricity consumption. Major industrial enterprises have been closed. There is much unemployment and the whole nation was forced to take a week off work over Easter to reduce power consumption. A recent currency devaluation has run up prices of imported goods and the first signs of social unrest are starting to appear. Should electricity production drop 50 percent or more, there is no telling where all this would lead in terms of oil exports and the cohesiveness of the Venezuelan society.

    Despite constant government assurances that most of the electricity used to pump and refine oil comes from dedicated thermal generation plants, it is difficult to imagine Venezuela’s cities enduring lengthy power outages for very long while the refineries and oil export pumps continue to hum. The choice between 27 million outraged people, 93 percent of whom live in urban areas, taking to the streets or cutting oil production so that power can be diverted to ease life in the cities is not a hard one. If significant social unrest does occur there is obviously a risk of reduced oil production.

    A second problem for the Chavez government is that this crisis may not go away anytime soon. While the summer rains are likely to allow the Guri dam to resume production, the key question is how much the reservoir refills before the dry season starts in October. It will take some prolonged torrential downpours this summer to return the situation to normal.

    There are many possible outcomes to this story. The best, for the Venezuelan people and U.S. wallets, would be the arrival of heavy summer rains within the next month so that nothing would have to shut down and the oil would keep flowing — until the next drought. At the minute the government is scrambling to import additional thermal generating equipment, but building and integrating such facilities into a national grid is usually measured in years and not months.

    At the other extreme, the drought continues so that some shutdown of power generation is necessary later this spring and the Guri’s water level builds slowly over the summer months as large inflows never materialize. Because Venezuela has parliamentary elections (Chavez seems to have made himself something close to President-For-Life) coming up in the fall, the government will do everything in its power to ensure that the lights are on for Election Day. Should extended blackouts occur, there would be paralysis in the cities; factories would close; water, food, communications, and transportation would be in short supply; and crime would explode. The viability of the government would be sorely tested and it is not difficult to conceive of Venezuela’s oil exports dropping precipitously amidst the turmoil

    Take more than a million barrels of oil exports a day off the table, and we are likely to see some very high oil prices no matter how much spare capacity the Saudis have.

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