Comments: Climate warning is a bit too stern

"the question of whether oil is running out is central to the debate over climate change"

That's a half-truth at best. The largest contributors to greenhouse gas emissions are coal and gas-fired power stations.

I think the idea that OPEC is attempting to cut production to keep prices artificially high is dubious - the same would have to be happening for natural gas and coal recently which have both seen surges in demand and prices. Conspiracies aside, sometimes the most obvious answer (demand-led price increase) is the correct one.

Finally the idea that we should gaily use as much oil as we want because it'll run out anyway is odd. Could it be that it's precisely because people are taking your advice that demand for oil is so high and prices are so high?

Peak oil is not a conspiracy - it's an economic fact of the supply and demand life cycle.

Posted by G Campbell at November 5, 2006 01:36 PM

If oil deflates, I suggest somebody chuck a couple of Viagra down the oil well. That should get it peaking nicely.

Posted by Werewolves at November 5, 2006 02:33 PM

Viagra aside - a bit of a misunderstanding here. The peak oil lobby says we've reached that point now (though some said that in the mid-1990s), while the Stern review says there won't be a peak over the next 50 years. I say there probably will be, but not for about 20 years - but even before that there will be periods when supply shortages bite. And, as I say, it makes sense to wean ourselves gradually off fossil fuels.

A misunderstanding too on the Opec point. It is cutting output to keep prices up after one of the sharpest falls on record from the highs of the summer. Its aim seems to be to keep prices in a $50-60 a barrel range. Coal and gas prices have also fallen in recent months, dramatically so in the case of gas.

Posted by David Smith at November 5, 2006 03:10 PM

I'm disappointed - I enjoy a debate but you're countering facts with more opinion.

"If burning fossil fuels is the main cause of rising greenhouse gas emissions, and one of those fuels is on its way out, perhaps we should not be so worried."

What you're saying (or what you've said) here is that because one of the factors of the problem may lessen in significance, we can safely ignore the problem.

This is an old fashioned Ignoratio elenchi conclusion. And you're persisting with your OPEC conspiracy idea - that's your opinion, not a fact. You're famous for your $40 a barrel prediction, but only because it was and continues to be spectacularly wrong.

Jeremy Clarkson may get away with such an argument but he also remarkably predicted the demise of the new fangled "Internet" - in 1995.

I can only urge you not to share too much in common with him, as I'm quite sure you wouldn't want his track record on future predictions.

Anyway, we've got a rate decision next week which I'm sure you'll approach with more rigour.

Posted by G Campbell at November 5, 2006 11:20 PM

I also enjoy a debate but it is difficult when the person on the other side is unaware of the basics, or deliberately misunderstands them. We used to have a strange character on the site who popped up under a variety of names, and who used a very similar approach. I do hope he's not back under another guise. So let's have a few facts:

Fact 1: OPEC is cutting output to keep up oil prices. That is what the president of OPEC and every oil minister has been saying over the past few weeks.

Fact 2: If the oil ran out there would be less of a problem over carbon emissions - as an example 11% of world energy consumption is on US highways.

Fact 3: My prediction of a $40 a barrel oil price has not been proved spectacularly wrong. I didn't say we would return to $40 a barrel immediately. I did say we would get back there in the medium-term as has been the case for every oil price spike through history.

Fact 4: The Bank of England's interest rate decision is this week.

Posted by David Smith at November 6, 2006 09:01 AM

Fact 5: Annual Greenhouse Gas Emissions by Sector (2000)

Power stations 21.3%
Industrial Processes 16.8%
Transportation fuels: 14.0%
Agricultural byproducts: 12.5%
Fossil fuel retrieval, processing and distribution 11.3%
Residential, commercial, other sources 10.3%
Land use and biomass burning 10.0%
Waste disposal and treatment 3.4%

Fact 6: From the OPEC website:

"If demand grows, or some oil producers are producing less oil, OPEC can increase its oil production in order to prevent a sudden rise in prices. OPEC might also reduce its oil production in response to market conditions."

No conspiracy there. Although yes, of course, maybe that's a conspiracy too.

Fact 7: Monday is the start of the working week, but (lets face it) that's petty anyway, right?

Fact 8: There must be a pattern - maybe I'm a collaborator with this mysterious figure from your past. Perhaps he's from OPEC?

I don't want to make an enemy of you David. I enjoy this site but more rigour is needed in some areas. I fear that you tend to disagree with your readers only to be later proven incorrect. A good economist listens - two ears and one mouth, used in that proportion.

Posted by G Campbell at November 6, 2006 09:50 AM

You talk about rigour and then come back with responses that lack both rigour and common sense. I'm assuming you're just unaware of what's been happening in the oil market recently but I'm surprised you're prepared to sound off from such a position of ignorance. But here we go:

This is from the FT, October 20:

"The Organisation of the Petroleum Exporting Countries on Thursday night agreed to cut production by 1.2m barrels a day, showing its determination to defend $60 as its new minimum international price. Opec oil ministers, who had for the last two weeks been divided over how to implement the cut, on Thursday agreed that each of Opec’s 10 active members would participate on a pro rata basis, said Edmund Daukoru, Nigeria’s oil minister and Opec’s current president.

Oil prices in the last three months have fallen 25 per cent to below $60 a barrel. Mr Daukoru said: “We have never seen a drop [in the price of oil] like this in many years.”

As for source of carbon emissions, you appear to think that the only use of oil is in transport. As the piece says, nearly 40% of expected fossil fuel use over the next 50 years will be in the form of oil. If the oil was not available there would be some switching from other fossil fuels but there would also be fewer carbon emissions than in the base case, as I said. It is a very simple point.


Posted by David Smith at November 6, 2006 12:14 PM