Just over a year ago, and spurred by an article in Time, I wrote a post on the possible global supply of lithium, which is used in renewable batteries, and a major choice for use in the batteries of electric vehicles, such as the Chevy Volt. Since the story has acquired more recent interest this week, and with new information, it is worth re-visiting the topic.

U.S. January oil demand down 3.8 pct vs yr ago-API

WASHINGTON (Reuters) - U.S. demand for crude oil and petroleum products fell sharply in January as the economy sputtered along the road to recovery, industry group American Petroleum Institute said Friday.

January's total petroleum product deliveries, excluding exports, averaged 18.407 million barrels per day, down 3.8 percent from a year ago, according to its report.

Deliveries of distillate fuels, which include heating oil and diesel, fell 12.2 percent to 3.578 million bpd.

API Chief Economist John Felmy said an 11.5 percent drop in demand for low sulfur distillate fuel, which is used by trucks, is a bad sign for the economy.

If I were to ask 10 random people what they would expect would be a sign of the arrival of “peak oil”, I would expect that all 10 would say “high oil prices”.

Let me tell you what I think the symptoms of the arrival of peak oil are

1. Higher default rates on loans
2. Recession

Furthermore, I expect that as the supply of oil declines over time, these symptoms will get worse and worse—even though people may call the cause of the decline in oil use “Peak Demand” rather than “Peak Supply”.

This post is also published at Oil and Gas News.

Crude diplomacy: Iraq, Iran and the politics of oil

Iraq is now trying to recover its glory, with plans to quadruple production or more. This could transform the global oil industry; it also threatens two other founding members of OPEC. Saudi Arabia might have to share its leadership of the organisation and Iran faces an even greater setback. Close relations with China, based on Beijing’s thirst for oil, have helped Iran to avoid isolation over its nuclear programme. But Chinese oil companies are now turning their attention to Iraq, with American backing.

Yet Iraq will have to pull off an unprecedented feat. In the history of the modern oil industry, no country has increased output with the speed the Iraqis envisage. Over the next seven years Iraq intends to go from producing 2.5m barrels per day to 12m b/d, a target that exceeds Saudi Arabia’s current output by more than 30%. To this end, Iraq has signed ten deals with most of the world’s top oil companies. Some got down to work this month.

Dave Rollo of the Bloomington, Indiana Peak Oil Task Force sent me links to the material prepared by the task force, and wanted me to let others know about the work they have been doing. The main piece of work the group produced was a Final Report of the Task Force.

In this post, I thought I would share with you the executive summary of the final report, including a list of vulnerabilities and strategies identified by the Task Force. The latter includes a fairly detailed list of suggested actions which I thought readers might be interested in discussing. Are these reasonable actions? Which ones surprise you?

Even if you are a staunch proponent of U.S. biofuel policy, it is hard to argue that the current subsidy on grain ethanol serves the purpose it was designed to serve. Further, it does not help ethanol producers compete against oil companies. Why? Because we now have mandates. As I will explain here, this nullifies the purpose of the subsidy.

But first, how did we get to this point? In an effort to spur development of a domestic renewable fuel industry and wean the U.S. off of foreign oil, the U.S. government introduced tax credits for ethanol usage with the Energy Tax Act of 1978. The tax credit was an exemption to the Federal Excise Tax on gasoline, and amounted to $0.40 for every gallon of ethanol blended into gasoline at the 10% level (increased to $0.60 per gallon in 1984 and gradually decreased to the current level of $0.45 per gallon).

(Note: This was also published to Forbes' energy blog.)

The Peak Oil Crisis: The Crunch

The first two issues encompass the balance of new oil supplies and declining production from existing oil fields. Here the report suggests a fairly specific time frame when significant additions of new production to the world's oil supply is likely to end. The report says time is around the end of the current year. From 2011 on, the relentless drop in production of just over 4 million b/d from the fields that are currently producing about 85 million barrels a day will be just barely balanced with production from new projects through 2014. After that world production will go into decline.

In other words, the world's ability to keep increasing its oil production will come to an end this year after 150 years of more or less steady growth. While new production from projects such as those in the deep waters off Brazil and the Gulf of Mexico will continue, these projects are five to ten years away from significantly adding to global production and likely will be overbalanced by the 4 million b/d annual drop in production from existing fields. New production will, of course, slow the pace of global oil depletion, but will not be enough to allow for global economic growth.

(Editor's note: Below is an essay by new TheOilDrum contributor Debbie Cook. Debbie was formerly Mayor and Councilmember of Huntington Beach, CA from 2000-2008 and a US Congressional Candidate, 46th District in 2008. She is also President of the Board at the Post Carbon Institute. Long active in resource depletion related outreach with TOD, ASPO and PCI, she is also locally involved with energy/water and permaculture issues in southern CA.)

Jeffrey Sachs, economic advisor to the UN, in his recently published article, Fixing the Broken Government Policy Process , articulates four manifestations of the breakdown in Washington:

1. Inability to focus beyond the next election
2. Decisions are made through negotiations with those who will be funding the next election (i.e. industry lobbyists)
3. Technical expertise is ignored or bypassed
4. The public is largely excluded from the process

Sachs asks, “How can business and government work together without policies falling prey to special interests?”

He suggests that government initiate a more “open, transparent and systematic public-private policy process in each major area of sustainable development”—high-level roundtable proceedings that are open to the public, web-based, and include representatives from private business, nongovernmental organizations, government officials, scientists, and engineers.

While this all sounds good in theory, my eight years in public office tells me that one more group, no matter how it is constituted, issuing one more report, is not going to drive better public policy.

Even Boulder Finds It Isn't Easy Going Green

"What we've found is that for the vast majority of people, it's exceedingly difficult to get them to do much of anything," says Kevin Doran, a senior research fellow at the University of Colorado at Boulder.

President Barack Obama has set ambitious goals for cutting greenhouse-gas emissions, in part by improving energy efficiency. Last year's stimulus bill set aside billions to weatherize buildings. The president has also called for a "cash for caulkers" rebate for Americans who weatherize their homes.

But Boulder has found that financial incentives and an intense publicity campaign aren't enough to spur most homeowners to action, even in a city so environmentally conscious that the college football stadium won't sell potato chips because the packaging isn't recyclable.

The history of modern humankind has undergone two major energy transitions, marked by the invention and development of agriculture and the discovery and exploitation of oil. The two energy transitions partition human history into three phases: hunter-gatherer, agricultural, and industrial. Faber et al. (1996) refer to these phases as “Paradigmatic Images of the World,” because they describe the common structure of societies throughout the world. The most important question is “what is the next paradigmatic image of the world?” (Figure 1. A !Kung hunter-gatherer from the Kalahari Desert in Africa, image from here)