A few months ago, I posted a note on the need for the world to change its primary energy source before the end of this century. http://www.calvin.edu/archive/asa/200007/0167.htm I noted that 65% of the world’s energy today is derived from oil or natural gas. Failure to find this replacement will result in much societal unrest and upheaval. The events in the UK last week illustrate the problem effectively.
The UK, while self-sufficient in oil, has the highest taxes on gasoline of any of the western industrialized nations. As a comparison to those in the states who complain about high prices, this morning I filled my car up with approximately 12 gallons of gas. It cost approximately $60 dollars US. Seventy-five percent of this is taxes and this is the issue that seemed to irritate the UK truckers. On the way home from work on Monday 11, I heard that a few truckers were blocking a refinery. I thought it was a localized affair. Still being a bit new here, my access to news has been kind of spotty at best and I didn’t pay much attention. My wife and I decided to go to dinner and on the way, we noticed that every single petrol station had long lines of cars. We weren’t sure what was happening but figured that they had made an announcement that the cost of petrol would be rising the next day. We didn’t realize that it was a blockade of all the refineries in the UK. Since I had a rental car that was due to be retur
ned the next day so I didn’t see any reason to fill it up.
The next day the lines were every bit as long as the day before and filling stations were running out of oil. The government put the health services on alert as noncrucial operations were postponed. Panic buying set in as people began to realize that with no petrol, food trucks wouldn’t run and that it wouldn’t take long for the grocery stores to run out of food. Some customers went into stores and bought 50 loaves of bread without a thought that other people might need some of that food. A picture in the London Times showed a long supermarket shelf with nothing but empty shelves. Schools began to close as the buses ceased running and some people began to run out of gas couldn’t get their children to school. TV’s began to run coverage on which gas stations had gas, which of course, meant that people flocked to them and quickly drained them of every last drop. Eventually people were advised to call the gas station before burning their precious petrol by driving there. Had this happened in winter, businesses
heated by heating oil would have run short. Thankfully, Scotland is largely heated by natural gas.
My wife and I went to Paris during part of this time and when we were coming back seriously considered whether we ought to bring a bag of groceries with us. Having just moved into our house the week before, we really didn't have many supplies.
In the factories, production lines ground to a halt because inventories which were built up couldn’t leave the factory and new supplies couldn’t come in. Building sites were abandoned for a few days because of the same problems. Those sites which are built with a ‘just in time’ supply situation, quickly found that nothing could be delivered just in time. What is almost funny is that the tabloids over here strongly supported the strikes until Wednesday when they suddenly woke up and realized that with no gas, there would be no way to distribute the papers and they too would start losing money. That was when their headlines cried ‘Enough!’. It is easy to support someone when you don’t feel the pain.
Economic activity in the UK was ceasing very rapidly. In just four days, the government estimated that the UK economy lost 1 billion pounds—40 pounds per household. If the drivers had not ceased when they did, the entire economy would have stopped with the losses going up exponentially. The stock market took out its wrath on many companies with stock prices falling. One transportation group saw a 32 million pound (48 million dollar) wiped off its value in just 4 days. Who can make money when the trucks aren’t hauling anything? Even department stores saw sharp declines in their sales. People were not driving into town to go shopping there. John Lewis, a major department store chain here said that they lost 2 million pounds (3 million dollars in sales in that week). Airlines had to use empty passenger airplanes which were full of fuel to supply some of the airports.
The Sunday Telegraph Sept 17, page 22 gave the account of a reporter who was scheduled to review Toyota’s new Prius automobile which is a hybrid that can run on electricity or petrol. It has a fuel cell, which I have heard some people cite as the wave of the future and the replacement for gasoline. It was interesting that the reporter was supposed to get this car delivered on Friday the 15th, but he got a call on Wednesday from the manager of Toyota’s press fleet in Surrey saying that the lack of gasoline made it impossible to deliver the car! It seems that without gasoline, the Prius really can’t go anywhere. It uses gasoline to create the hydrogen for the fuel cell. No petrol, no hydrogen, no car!
Sometime within this century(most likely within the next 20 years), world oil production will begin its long slide just as the US oil production began its long slide in 1971. Whenever that peak occurs, it will mean several things. First, we will have used half of all the oil reserves on earth. Second, it will change our lives by making oil scarcer. And third social upheaval as was seen in the UK last week will be on the rise. All in all, it was an interesting peak into a future I hope we can avoid. The plain fact is that the world is hooked on oil with nothing being seriously looked at as alternatives, yet now is the time such planning should be done. Nuclear and coal are the two most likely near term replacements. The highly touted fuel cell simply is not a primary source of energy. Some other energy source must be used to split the hydrogen from the oxygen (or carbon) where it resides. In the case of the Prius, it is gasoline that is used as the primary energy source. Oil is still king.
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