Oil 1 Peak Oil 21

AT: Markets Solve

Frederic Leder, Analyst at Esso Research and Engineering & Judith Shapiro, President of Strategic Enterprises, August, ‘8

(Energy Policy, Volume 36, Issue 8, p. 2840-2842, Science Direct) [Bozman]
The problem with these arguments is that they are based on the assumption that disruptions in supply in one part of the world will be made up by increased supply from other parts. That, after all has been the pattern to date. For example, from 1974 to 1987, total OPEC production of crude oil declined in all but 3 years: 1976, 1977 and 1979. Total non-OPEC production, on the other hand, increased each year during the same period. As a result, total world production increased in all but 3 years: 1982, 1983 and 1985. In fact, from 1986 to 2005 total world production of crude has increased each year despite declines in specific countries (Energy Information Administration, 2006). Meanwhile, crude oil prices rose steadily from $10 ($20 inflation adjusted) in 1974 to a high of $38 ($104) in 1979 and then declined steadily back to $10 ($20) in 1986. Prices then fluctuated within a narrow band of $10–$20 ($20–30) from 1986 to 1999—with the exception of 1990 when they surged above $30 ($50) (InflationData.com, 2007 InflationData.com, February 22, 2007. Inflation adjusted monthly crude oil prices (1947-present) in Jan. 2007dollars. left angle brackethttp://inflationdata.com/inflation/images/charts/Oil/Oil_inflation_chart.htmright-pointing angle bracket.InflationData.com, 2007). Thus, the experience of supply disruptions to date demonstrates the need to hold steady until the storm passes, relying on adjustment mechanisms to steer clear of the worst effects. This response was appropriate in the past because shortages could be counted on to last as little as 1 month, as on May 1977, and no more than a year, as on April 1999 to March 2000 (Hirsch et al., 2005). In any event, the shortages eventually would be made up by increased production. Peak oil, however, creates a situation where world oil production is declining, demand increasing and prices rising. This combustible combination is bound to exceed the ability of countries to adjust in a timely way and avoid the worst economic effects, including rising inflation, higher interest rates, stock market panics and prolonged recessions.

AT: Natural Gas Fills In

Richard Heinberg, Senior Fellow at the Post Carbon Institute, ‘5

(The Party's Over : Oil, War and the Fate of Industrial Societies, p. 143) [Bozman]
Hence, natural gas will not solve the energy-supply problem caused by oil depletion; rather, it may actually compound that problem. Our society is already highly dependent on natural gas and becoming more so each year. But soon we are likely to see a fairly rapid crash in production. As my colleague Julian Darley has written in his book High Noon for Natural Gas: The New Energy Crisis, ?The coming shortage of natural gas in the United States and Canada, compounded by the global oil peak and decline, will try the energy and economic systems of both countries to their limits. It will plunge first the United States, then Canada, into a carbon chasm, a hydrocarbon hole, from which they will be hard put to emerge unscathed.? 6 Many alternative energy advocates have described natural gas as a ?transition fuel? whose increased usage can enable the nation to buy time for a switch to renewable energy sources. However, in view of the precarious status of North American gas supplies, it seems more likely that any attempt to shift to natural gas as an intermediate fuel would simply waste time and capital in the enlargement of an infrastructure that will soon be obsolete anyway ? while also quickly burning up a natural resource of potential value to future generations.

We’ve already hit the production peak of natural gas.

Ken Deffeyes, Professor Emeritus of Geosciences at Princeton, ‘5