news release: Gasoline Price Reflects Dwindling Global Oil Reserves, Not Merely Oil Price
by Jan Lundberg
15 August 2005
Editorial note: Being misinformed is common, but sometimes it is due to dysinformation from the industrial state. The public is kept from knowing about peak oil and the full implications including petrocollapse and a new paradigm to follow. As long as money is a society's raison d'etre, and no opposition movement arises, we are driving over the ecological cliff like motorized lemmings. This news release attempts to set the record straight about record gasoline prices, and offer a real solution. - JL
Berkeley, Aug. 15 - Jan Lundberg, veteran petroleum analyst who joined
the environmental movement and fought industry expansion, has a different
explanation for record gasoline prices than the one provided by his former
firm, Lundberg Survey, which on Aug. 14 attributed them only to high crude
oil prices.
"The peak of world oil extraction is approximately now, although reserves
data from the oil industry and OPEC are notoriously unreliable. Shortage
of crude oil has started to make itself felt, as strained production levels of the most useful crudes reflect tight supply. It is true that oil
demand has managed to reach record levels (82.2 million barrels a day;
source: IEA), but oil fields inevitably peter out," he told Fox News Radio
on Sunday.
Nearly 20 oil-exporting countries are past their peak in production.
Also, Saudi Arabia is showing signs of leveling off. Another sign of
dwindling geological resources is when industry does not invest in
drilling new wells - despite record profits for oil - and rather buys up
oil reserves via corporate mergers. "Refining capacity is almost maxed
out, but industry sees little point in building more refineries when crude
supply is in doubt," Lundberg added. World discoveries peaked by 1965,
and the trend in declining discovery is unalterable. U.S. production
peaked in 1970.
"Growth of the economy ends when petroleum is in short supply. When the
market really feels the gap between supply and demand widen, the price
will go through the roof. Alternative energy sources are not ready. The
coming oil shock will signal an historic flip-over from expanding our
civilization via petroleum dependence to seeing the commencement - after
"petrocollapse" - of a reversion to sustainable living based on local
ecological capacity. The short answer to 'What do we do now?' is
conserve, radically."
Lundberg also told Fox News that it is erroneous to calculate that the
adjusted price for gasoline, including inflation, is under the price of
two and a half decades ago. This is because "subsidies - direct, indirect
and hidden, such as the War on Iraq -- to oil and refined products, if
included in the price, would make oil cost perhaps $120 per barrel today.
This is one reason people must work longer hours and obtain extra jobs,"
he explained.
* * * * *
Background: Jan Lundberg ran Lundberg Survey in the 1980s and founded the
Sustainable Energy Institute to promote conservation and fight urban
sprawl. He was quoted in the House of Representatives on the effects of
peak oil on May 12, 2005 by Congressman Roscoe Bartlett (R - MD).
Lundberg's syndicated Culture Change Letter has appeared in the newsletter
of The Association for the Study of Peak Oil and Gas, in Truthout.org,
Bluegreenearth.com, From The Wilderness, The Social Contract, The-Edge,
and other publications. His writings have appeared in such newspapers as
the San Francisco Chronicle and the Financial Post (Canada).
Address: P.O. Box 4347, Arcata, California 95518 USA Telephone and
fax 1-215-243-3144 Website http://www.culturechange.org
Editorial Board
Bill Devall
Derrick Jensen
Janet Kobren
Susan Meeker-Lowry
Gar Smith
Miguel Valencia
Colleen Verdon
Editor and Publisher:
Jan C. Lundberg
International Editor:
Pincas Jawetz
Latin America:
Raul Henry Riutor
For background on petroleum issues, conservation, clumate protection and interviews with Jan Lundberg, please go to this website's Archive section.
Culture Change mailing address: P.O. Box 3387, Santa Cruz, California, 95063, USA, Telephone 1-215-243-3144 (and fax). Culture Change was founded by Sustainable Energy Institute (formerly Fossil Fuels Policy Action), a nonprofit organization.
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