The Oil Drum: Europe

This was posted in May 2007 and is worth reposting today given the new context of tense relations with Russia and worries/suspicion/empty talk about "energy weapons." The original post is built as a discussion an an Economist article about Russian gas (A bear at the throat) published in April 2007. Back then, "it took legitimate (if often poorly informed) worries about Russia's sometimes blustering behavior on the energy markets to peddle the usual insane crap that market liberalisation is the only solution to promote energy security." Today, the focus seems to be more on the geopolitical threat the Russia represents, but the conclusion is still, of course, about the incompetence and failure of continental Europe - this time not to liberalize, but rather to 'stand up' to Russia's bullying. Below, the original post, with some additional comments written today in italics and [between brackets]).

[Last year] I spoke at a debate on Gazprom at IFRI, a French think tank. That conference was organised after the publication of two quite different articles about Gazprom:

Gazprom as a Predictable Partner. Another Reading of the Russian-Ukrainian and Russian-Belarusian Energy Crises by Jérôme Guillet
Gazprom, the Fastest Way to Energy Suicide by Christophe-Alexandre Paillard

The titles give a hint that the papers start from pretty different positions - as you can see in the executive summaries of each that I am posting below, [but they in fact reach fairly similar conclusions, which are still relevant today]

Suburbs of Moscow, July 2008. You don't have to be able to read Cyrillic to understand the red sign (photo by the author).

Update
Medvedev Signs Georgia Peace Plan After Saakashvili (Update4)

The Georgian interior minister, Shota Upiashvili, said at a Tbilisi news conference that the Russians today carried out an attack on a railway bridge near the Georgian village of Grakali paralyzing the whole Georgian railway system.

Rail bridge destroyed west of Tbilisi - Reuters witness

KASPI, Georgia, Aug 16 (Reuters) - A Reuters television crew verified on Saturday that a railway bridge on the main line west of the Georgian capital Tbilisi has been destroyed. . .

Villagers said an explosive device had been detonated remotely on Saturday by men in military uniforms.

The peak and gradual decline in world oil production is beginning to spawn a set of geopolitical positive-feedback-loops that seem likely to exacerbate depletion and accelerate the effective rate of decline of world oil production. Rather than isolated incidents, these geopolitical feedback loops are the direct result of geological peaking in oil production. Unlike geologically driven peaking, however, the effective rate of decline caused by geopolitical feedback loops has the potential to continually accelerate. This post will lay out a theory to better understand the impact of this system of geopolitical phenomena.

I recently received an interesting e-mail:

Nancy Pelosi, Speaker of the House and Author of "Know Your Power: A Message to America's Daughters" will answer questions in a live discussion on washingtonpost.com today (Wednesday, Aug. 6 at 3 pm ET).

Pelosi will discuss the current political scene heading into the conventions, the message of her new book and other questions submitted by readers.

To submit questions and participate in the live discussion click here: http://www.washingtonpost.com/wp-dyn/content/discussion/2008/08/01/DI2008080102174.html

This seemed to me to be an ideal opportunity to question her on two issues that she is clearly passionate about, but seem to me to be diametrically opposed: Tapping the Strategic Petroleum Reserve (SPR) and reducing carbon emissions. So, I submitted the following question, several hours prior to the chat:

I have been gently chided on the internets for not doing any Countdown diaries since the oil prices have started going down. While the giddiness and glee demonstrated by many in the traditional media and elsewhere invites little but ridicule, as demonstrated by this graph below, prepared for the Oil Drum, some serious questions have been raised and deserve answers.

So, beyond the semi-glib answer that nothing much has in fact happened in the oil markets in the past month (after all, the recent decline is still smaller, in percentage terms, than several others in the past couple of years), here are a few points worth making.

An installment of the Countdown to $200 oil series

In James Howard Kunstler's view, public spaces should be inspired centers of civic life and the physical manifestation of the common good. Instead, he argues, what we have in America is a nation of places not worth caring about.

Under the fold, more Kunstler (in a short telephone interview), an interview with Paul Erhlich at E&ENews, and a copy of a recently published paper of Al Bartlett's on population, climate, and the world we live in.

This is a guest post from Tim Jones, the Convenor of the Sustainable Energy Forum (New Zealand). It was previously published in The (Wellington) Dominion Post.

In November 2007, when the world oil price was nudging US $90 per barrel, I wrote an article entitled “The Future of Oil” for the Dominion Post. The article explained that oil prices were rising because world oil production had been virtually static since 2005, while demand had continued to rise.

Since my article appeared, the price has climbed still higher. And there’s not much relief in sight: the International Energy Agency is now predicting only a slight increase in supply over the next couple of years, and a worsening supply crunch after that.

It appears that historically high oil prices are here to stay, and further increases remain likely. The question now is: how should we respond?

This is an announcement from the UITP. The International Association of Public Transport (UITP) is the worldwide network of public transport professionals. UITP represents over 3100 urban, local, regional and national mobility actors from more than 110 countries on all continents.

Today in Canberra, the Australian Office of the Brussels based International Association of Public Transport – UITPANZ, strongly condemned the proposal by the Federal Government to ease the pain of an emissions trading scheme on motorists, while it appears the public transport sector will be left to fend for itself in the face of higher energy costs.

“It will be unfortunate if train, tram and bus users around Australia had to pay higher costs for electricity while private car drivers were compensated”, says UITPANZ Executive Director, Peter Moore.

I have a friend who is addicted to nicotine. His liberal friends tell him that this addiction is bad, and point out that it is costing him too much money. Therefore, they want policies passed that ensure that he can continue to consume as much as he likes, and not hurt his budget too much. They are sure that nicotine substitutes will come along soon to save the day. For reasons I detail below, I call this the Boxer approach, but it could just as easily be the Pelosi/Democratic Party approach.

His conservative friends agree that he is addicted, but their solution is to carve out areas in the U.S. where we can grow more tobacco, and therefore his addiction can at least be homegrown. Sort of like "If you are going to smoke pot, at least smoke American pot." This is the Bush approach.