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CHRISTIAN MEDIA NETWORK By Adam Porter Thursday 30 September 2004, 18:50 Makka Time, 15:50 GMT In a world dominated by self-censorship, only the brave speak out. But in a world running on cheap energy, with all the consequences that it brings, only those who value their integrity above their wallet are worth listening to. Back in April one man, Iranian oil and energy analyst and expert Ali Bakhtiari did just that. He stood up and made a prediction that could have seen him ridiculed. "By the end of the year we will see oil at $50 a barrel," he told an audience at the annual gathering of the Association for the Study of Peak Oil (ASPO) in Berlin. To make a prediction that takes in record high prices is one thing. To name the price is another altogether. But now, while OPEC, the major industrial nations and Saudi Arabia chant their mantra that there is "no problem", Bakhtiari seems more vindicated than ever. Out of control Trouble is, the rise of oil's price range is an undoubted economic threat. Not to the super rich, the top 1% of global earners, or the super poor, the 50% of the world's people who live on less than $2 a day, but to everyone else. Around three billion of us. "I am afraid I think the price will go higher," says Bakhtiari worryingly. "I had hoped it would stay in the $40 range. I think, at that level, economies could start to cope, but now the price of oil is out of anyone's control." Bakhtiari says, "I hope that we don't move into a fifty-dollar range. The big economies, and by that I mean the US, the EU, China, India and Japan, are just starting to get used to the idea of $40 a barrel. We have passed that financial and psychological barrier, but if we moved straight into the $50 range, then that is not good at all." However, he does not see the forty-, or fifty-dollar, range as something that will last forever. Indeed not even for very long at all. Instead, he says the price is being driven by something far more fundamental. Peak oil syndrome? "No one can restrain the price any more. For example, everyone thought that it would be OPEC who could manage demand. But that is now in the past. Now it is really peak oil that is behind the wheel of the car. Peak oil is driving the rise in price and demand is not the real question. We are entering a new era, but we are only at the very beginning of it." The idea behind "peak oil" is this. That, as the planet reaches the halfway point of consuming all its available oil, then a combination of bullish demand, slowing fields and insurmountable supply bottlenecks will create brutal price shocks. Almost certainly slicing the head clean off the world economy in the process. This peak in oil supply will act as an economic guillotine. Yet the thread suspending the blade above our heads will be released without warning. Politicians, producer countries, major oil companies and consumer states are not about to announce their own demise. It would not be good for business, or re-election, or both. Unstoppable "If there was nothing to be worried about, then there would be no price increases," explains Bakhtiari. "If there is no reason to worry, because there is plenty of oil and OPEC or Yukos or whoever can simply pump some more, then there would be no problems and no rises in price. The market would not be worried at all." Whilst Bakhtiari admits predictions are fraught with danger, his own research, so far extremely accurate, says peak oil has yet to arrive. Like Hurricane Ivan blowing in from the ocean, we may only be experiencing the first stormy gusts. "I think the peak will arrive around 2006, 2007. But, this is only 15 months away. That is all. At that point, no one can say what is going to happen. Except the price is going to go up. And no one will be able to stop it." It doesn't matter whether you believe this is a hoax or not, the reasons for bringing it on or not. Fact is, its happening. Are we ready for $60 dollar a barrel oil, then 70? Heard this am on morning edition of NPR that oil averages $1.99 a gallon and year over year, it has gone up 63%. One financial newsletter writer, Stephen Leeb, recently said on an interview at Financialsense.com, "watch out when oil goes to 80% year over year. All bets are off and the economy will skid to a halt, said he. How high per gallon must the price rise, before Americans are forced to change drastically their driving habits. All one must do to see the grave implications is ride around a large city. I did, ...around St. Luis, recently. I marvelled at the engineering marvels of the American highway system and the numerous safe exits to various suburbs, adjoining municipalities, etc. I sat and marvelled at the most technologically sophisticated and efficient road system that transports millions of cars with little bottle-neck. Amazing the ability of ingenious people, "with the means." What a wondrous achievement, truly. However, I marveled just as much that nowhere, did I see one, not one lonely little public bus transporting anyone anywhere. How are all these millions of just one large city totally dependent on the private car.... and then multiply it by hundreds of large cities, going to do when gas is 3 or 4 or five dollars a gallon, the average price in much of the world. Americans are not being prepared. The silence is eerie. Really, it is criminal! Yes, General Electric and others like them are playing around with alternatives. Playing around. Were expensive gas with shortages as a norm taken as a serious matter, hundreds, thousands of companies would rise up and go at it 24 hours a day. But even if the gargantuan effort were to start and become ceaseless, starting this late, how many scores of years will it take to have even something called loosely, relatively efficient alternative systems. It won't happen. Just looking at the logistics, that I know. But I do foresee a day soon, just as it was as a child growing up in the bush of East Africa, where only a very few haves will drive and the few who saved lots of money for the eventful times of great reckoning. Of course life will change drastically. Some, who are prepared, say for the better. All sorts of entrepreneurial endeavors and manufactures will predominate locally. But what about that great, dependent, helpless, not very healthy great mass of people, who have no clue about how to do anything on their own, who have not done anything but click or turn this or that contraption, to get all their ammenities. What about that great mass! Crime will grow, grow, grow, overnight. Will it ever. Hello Colombia, Nigeria, Mexico City, Moscow. Are you ready for $ 60-70- dollar a barrel gas? --Angie Carlson |
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