Steve Graham is an award-winning freelance Web and magazine writer living in a Fort Collins, Colorado, neighborhood that will 
| Whistle Blown on Peak Oil; Renewables Can Cash In |
| Wednesday, 11 November 2009 | Steve Graham | Blog Entry |
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This week, Hurricane Ida briefly shut down oil production in the Gulf of Mexico. Gas prices didn’t substantially move. The same day, the International Energy Association (IEA) released a worrying report about future oil reserves. Gas prices still didn’t move, but they should have. Before the report was released, a whistleblower from inside the IEA told the Guardian newspaper his organization is sugarcoating oil projections and has been for some time. The IEA predictions are not exactly rosy, forecasting a nearly 50% rise in oil prices by 2030 and production that just barely keeps pace with demand. However, the whistleblower said the price projections are disingenuously low. He said production cannot keep up with rising demand, and probably can’t even sustain current levels. He charges that the United States government and other energy-hungry world governments pressured the IEA to fudge its numbers to avoid panic in the oil market and rising prices that could inflate the prices of virtually every product, and hit consumers’ pocketbooks hard during an already weak economy. The strategy is working. Inflated IEA supply forecasts are keeping oil prices stable for now, but the group is just delaying the inevitable and making the coming spike in oil prices more extreme once consumers and markets realize peak oil has come and gone, and demand increasingly outstrips supply. Who Will Profit However, if those do-gooders start companies to develop their renewable technologies today, they could be ready for the next oil spike and become the next energy tycoons. The misleading IEA projections could help by giving them a few extra years to perfect their technologies and hit full production capacity at exactly the right time. My favorite example is Solix Biofuels here in Fort Collins. The company has been producing algae biofuel for about three years, and is ready to start mass-scale production soon in Colorado and Chile. The company is even developing green diesel, an algae-biofuel product that can be a direct replacement for diesel gasoline. If Solix’s algae biofuel and other alternatives are produced on a mass scale at less than $110 per barrel, they will be ready to neatly replace oil in time for crude sticker shock. And just imagine the demand if the spike coincides with another major storm shutting down production off the Texas coast. The oil companies that snicker at algae fuel today may be rushing to secure Solix supplies or technology tomorrow.
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It looks like gasoline prices are going to go much higher, much sooner than we've been led to believe. But please read to the end of this entry before rushing out to fill up your gas tank. However, I understand if you don’t.
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