It’s finally happened: $100-per-barrel oil is no longer some looming specter, just a dark possibility used by Peak Oilers to frighten little chillun’s into driving less.
As we welcome in 2008, the specter of $100 oil has gone from pernicious possibility to fact-of-life reality as oil prices touched $100 per barrel today on NYMEX.
Of course, oil prices didn’t stay at $100 for long before the fell back into the “comfortable” $90s.
But consider this: when this blog started in summer 2005, oil prices were trading around $55 dollars, already up about 100% from the $20-30 price range oil hovered at between 2000-2004.
2006 started with oil prices trading around $60/barrel and by the beginning of 2007, prices had topped $75 before falling back down to around $60 to welcome in the new year.
Of course, the brief fall in prices would be just that - brief - and oil prices climbed steadily in 2007, inching towards record-setting heights seemingly every day.
On October 19th, 2007, oil prices topped the $90-per-barrel mark for the first time in history before falling back into the $80s. Crude oil prices jumped by 28 percent just between August and October 2007.
By year’s end, $90-per-barrel oil seemed pretty normal and it was only a matter of time before the $100 threshold was breeched. Well, today, our time is up as oil hit exactly $100.00/barrel today on NYMEX before receding into the high $90s.
$100/barrel is clearly a record in nominal prices, but it’s also pretty close to - if not exceeding - the inflation-adjusted record price as well. Depending on the adjustment, $38 barrel of oil in 1980, the previous inflation-adjusted record price, would be worth somewhere between $96 to $101 in today’s dollars. We’re entering uncharted territory in oil prices now.
Anyone want to wager on where oil prices will be by the end of 2008? If so, place your bets in the comments section here (and for a more lucrative prize: a bottle of champagne to the victor I believe, check out this running contest at Jerome a Paris’ DailyKos dairy).
[A hat tip to Jerome a Paris at DailyKos]
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Hooray! How many more hundreds of dollars before it reflects the real cost of burning a barrel of oil?
i’m hoping for $200 a barrel by the end of 2008.
Too many environmentalists and climate activists have been hoping that a rise in gas prices would lead to a new consciousness and awareness of what is at stake. Well, there is some of that…but a lot of it is leading to general anxiety over the economy and making our opposition - Big Oil - a lot more money to fight us with. It also makes some false solutions look a lot more appealing to the public, like liquid coal or deforestation diesel, while providing the incentive to use “unconventional oil” such as Canadian tar sands or Arctic National Wildlife Refuge oil.
I think these high oil prices CAN be an opportunity, but only if we make it one. Otherwise, it will be more of the same and another talking point for both the good and bud guys. We need to frame and set this debate early, about moving beyond oil…not just replacing it.
i’m not really hoping for high gas prices as a means of convincing folks of something, i’m thinking as it more of a sign of a post-peak-oil economic crash.
And that’s really something you are looking forward to Evan? That seems a bit sadistic to me…
I also find these high oil prices a sign of peak-oil, or more appropriately speaking, plateau-oil (as high prices will increase production of more expensive alternatives and destroy some demand, prolonging what some predict as a sharp peak and decline into a longer - who knows how long? - plateau of relatively stable production and climbing oil prices). In contrast though, I do not find this to be a cause for celebration and see these record high oil prices as a clear sign of the urgency of our narrow window of opportunity.
Both peak/plateau oil and climate change present narrow windows of opportunity for us to act to transition to a sustainable energy future before our efforts and resources are wasted simply prolonging the inevitable (the day when we must reduce our oil consumption and find alternatives) and cleaning up after climate disasters. Furthermore, as the consequences of high oil prices and climate chaos get more severe, people will become consistently more motivated by fear, scarcity and grief, invoking survivalism, selfishness and violence - all the worst in humanity - at just the time we must summon up all the best our human nature has to offer.
We must act, and act quickly - like yesterday, people - to transition rapidly to a sustainable, just, and prosperous energy future. There is simply no alternative, other than the end of life as we know it. While Evan may welcome that, I find it a nightmarish possibility and am motivated with a surging sense of urgency to make a brighter dream (not a nightmare) - a vision of a sustainable, just, and prosperous future - a reality.
Act now and we have a shot. Wait too much longer and we will be condemned to a darker future. These are our options. The choice seems clear to me.
If history is any guide, civilization switches to the higher power density source as the lower power density source cannot match scale or becomes too scarce. Solar and wind were mostly replaced by wood which was replaced by coal which was replaced by oil and gas (whew!).
There are both high-density and low-density power sources that are low-carbon and could be tapped if oil and gas become permanently too expensive. The question of which sources or combinations thereof should be discussed and debated.
Sources such as?
R Margolis,
You are an engineer, I am a historian…so I would love to hear what combinations you have been thinking about. I haven’t noticed coal being replaced, in aggregate, simply taken out of the ‘personal’ and transportation fuel column and placed into the ‘industrial’ cycle, or solar for agriculture being replaced, in fact, agricultural land has increased in acreage. Wood, I will admit, in the US was mostly replaced.
I think the replacement model doesn’t hold up as much as a “portfolio” model, where humanity exponentially increased its use of energy and sought new sources to add contribute to it. Sweet, light crude is an incredibly dense energy source and easy to transport to boot. Too bad it is helping destroy the biosphere.
We do need to decarbonize the economy, but I think that we might just need a new hybrid solution. With a decentralized, smart grid that uses passive design, residential solar, industrial wind, concentrated solar, tidal, geothermal, co-generation heat and power biomass for urban centers, highly efficient electrified transport (road and rail) with advanced electrical capacity storage (for high-density power needs).
It might not be enough, but it would get us pretty damn far. Hell, if we switched a few priorities (like from just faster microprocessors to more efficient ones - see the One Child Laptop as an example) there could be “breakthrough” efforts that aren’t too hard to imagine.
Jesse,
the way i see it is this. industrial civilization is causing incredible suffering to humans, nonhuman animals, plants, soils, watersheds, ecosystems and the planet as a whole. it cannot be reformed. if this is so, then it is better that it collapse sooner, so that ways of living that are sustainable can emerge. the transition will be rough and cause a lot of suffering, but not more suffering than what industrial civilization is presently inflicting upon us. i know my statement was rather terse, but i do recognize the consequences of what i’m suggesting. and it scares me, but that venture into the unknown does not scare me as much as industrial civilization and its icarus-mythology of never-ending technological progress, population growth, and economic expansion and growth.
in good heart,
Evan
Evan,
I guess I simply disagree with your premise that “industrial” civilization “cannot be reformed.”
I believe we can transition from our currently unsustainable - and yes, destructive - civilization to one that is sustainable, just, and prosperous and that we can do so without an utter collapse of civilization and the suffering and horrors that will bring.
You seem to want to usher some kind of apocalypse as soon as possible so that a lucky few that endure and survive the nasty, brutish and violent interim may emerge in a “sustainable” way of life. I’m sorry, but I’m simply not going to cheer on, let alone rally behind such a vision of the future, and I doubt you will find many who will.
I also disagree with your statement that this necessary and impending civilizational collapse “will be rough and cause a lot of suffering, but not more suffering than what industrial civilization is presently inflicting upon us.” How much are you really “suffering” now Evan? How much are others suffering? Do you really want to see a future where billions of people (and yes non-humans as well) perish in violent conflicts and from starvation and disease (and for non-humans, from hunting and gathering) as civilization collapses, scarcity reigns and people revert to their most violent and survivalistic modes? I really hope I’m misinterpreting what you are envisioning, but I can’t see how such a future is something worth hoping for, let alone working to usher in.
Sincerely,
Jesse
I will agree with Evan that you cannot have population grow forever. However, I do believe that the problems lie with the benefits of civilization not being spread thoroughly rather than the problem being the existence of civilization.
As to Richard’s comment: more of our total energy now comes from oil and natural gas than it does from coal. Yes, coal is the dominant fuel for electricity in many countries (e.g., the US), however my reading of our past energy transitions (i.e., the majority of energy transferring to a different fuel) has been one of moving to higher power density fuels.
I also agree with you on renewables to the extent they can contribute. I am not so sure about “smartgrids” as you properly mention the need for an economic and high density energy storage technology (e.g., a cheap superconductor). Such a technology would indeed allow one to harness the wind in Montana and power Florida. However, other than pumped hydro storage (which is site limited), I have not heard of anything on the horizon that is cheap enough that combined with renewables will be attractive vs fossil w/sequestration or nuclear. Efficiency is fine, but even if the US disappeared, you would have increased electric growth with Asia and Africa having only 25% of the US per capita electric demand.
I would see a combination of efficiency, renewables, with the baseload being sequestered fossil fuel, geothermal, and nuclear (maybe OTEC in tropical regions). If energy storage comes to pass, you can replace the fossil and nuclear. I believe we need to use current technologies to buy the time (and move the debate from either/or) to see which technologies can be brought to fruition.
Wondering what the “cost” of $100/barrel oil is to the United States’ economic prosperity and international competitiveness? Check out SolveClimate’s excellent post: “Hello $100 Oil, Goodbye American Might“
This is a generalized posting in response to many of the prior postings. There seems to be this idea that if someone thinks civilization will collapse due to a projected ever increasing gap between oil supply and demand, then they are wishing it comes true. I don’t understand that kind of rationale. I for one do not see a plan B to keep up with increasing demand for a commodity that so far cannot be replaced, and therefore do see either a collapse of civilization or at least a very hard road ahead as the world economy slides deep into a recession/depression. At the same time however, I am not wishing for this to happen. So, I have to wonder why someone would presume another is wishing for something just because they have a negative viewpoint of what could happen. How does one follow the other necessarily?
I read Twilight in the Desert, Peak Oil, and numerous articles on the internet on a multitude of websites, and have so far seen no way out of a major contraction of the World economy. Cheap oil has greased the economy with cheap energy, fertilizer and plastic products that are the foundation of the economy. The World uses 85 million barrels of oil every single day. If demand goes up to 95 mbd and supply can only provide 85 in total liquids, then the 10 mbd gap will cause a huge price increase and subsequent contraction of the economy. That’s not wishing it will happen, it’s simply a logical progression of facts.
Sure, we can blindly hope that non-dense forms of energy will fill the gap, but how? I see all these prez candidates rattling on about being energy independent from the Middle East, but how exactly? With what? Algae ethanol? No, it’s still in R&D. Tar sands or liquids from coal? What are the costs and scale of these operations? Are they economical or is the oil so expensive that the price goes up to 200 bucks a barrel? What is the threshold price of oil that exceeds economic sustainability?
I have to wonder what people are thinking, when they say, “Oh, I don’t care how much I pay at the pump”. It’s not going to be about individual capability to pay for a gallon of gas, but rather the integral capacity of the overall economy to handle a dwindling staple commodity. Fact is, humankind as a whole drove the Chevy to the Levy, but the levy was dry, and good old boys… you get the point. There was no plan B.
Chris -
Of course one could move toward higher density energy sources. If nothing else, they might buy the time to figure out if the lower energy density alternatives would work or if better energy storage could be developed. I realize most of the folks on this blog would not prefer this, but this might be the plan B you are speaking of…
R. Margolis -
Sounds good on the surface. What are the details of this plan B? Will a jet fly on any of these plan B energy sources? What form of energy under this scenario is used for shipping? Please, wow us with the details, and if feasible, maybe a You-Tube video can be produced to inform everyone as to how we all move forward to replace oil.
R. Margolis, Maybe there is hope afterall -
http://www.sciencedaily.com/releases/2008/01/080106202952.htm
The clock is ticking - time will tell - but maybe now there’s a mix of doom and gloom, coupled with innovative possibilities that can transcend the dovetailing of global warming and peak oil into something much more benign.
Well, I cannot see a battery operated A380…
Jets will likely use a hydrogen or hydrocarbon fuel and would have to compensate for the carbon (e.g., re-forestation or agricultural improvements).
For stationary power, nuclear, geothermal, and maybe OTEC are options. This can buy the time for the development of energy storage technologies that can allow replacement with renewables. One thing on the political front that is needed is the willingness to build SOMETHING. In the current climate, windmills get protested by locals (e.g., Cape Wind and Long Island), LNG terminals are opposed, and even transmission lines and substations are having approval issues. If this continues, even the new technologies will have trouble.
Crappola.
Oil will crash by the end of this year, or early next. Greedy investors who bet their life savings will be leaping form 60th story windows.
China’s economy will tank soon (double-digit inflation) which will free millions of barrels.
And I will continue to happily drive my Dodge Ram.
Nothing. NOTHING can sustain such a crazy spike. Not even oil.