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The Peak Oil Debate is Over – Dr. James Schlesinger

Can the political order face up to the challenge? There is no reason for optimism.

We are likely to see pseudo-solutions, misleading alternatives and sheer sloganeering: “energy independence,” “getting off foreign oil” and the like. All of that sheer sloganeering we have seen to this point.

The political order (which abhors political risk) tends to rely on the Biblical prescription, “Sufficient unto the day is the evil thereof.”

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Electrification and Expansion of Railroads as a Response to Peak Oil, By Alan S. Drake

One of the quickest and most effective responses to the realities of a post-Peak Oil economy is to electrify and expand the main-line railroads (about 35,000 miles in as little as 6 years) and later the busy branch lines (another 35,000 miles). The railroads burn slightly less than 300,000 b/d and inter-city trucking uses about 2 million b/d. Inter-city freight includes some of the most essential uses of oil today, such as delivering food and a variety of critical materials.

Replacing 300,000 b/d with electricity is good. Replacing 2 million b/day is significant. Creating a transportation system that can quickly, reliably and efficiently transport food, critical materials and people without oil is a vital national security concern.

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Review October 25, 2010

Oil prices started the week just below $84 a barrel; plunged to touch $79.25 on Tuesday in reaction to an unexpected interest rate increase in China; and then bounced back to close at $81.69 on Friday as traders decided the rate increase would not slow Chinese economic growth. As usual the value of the dollar, and expectations for same, were behind many of the price movements. The general weakening of the dollar and anticipation that the US will soon begin “quantitative easing” again continues to lend support to prices.

The weekly US stocks report showed total commercial stocks down by 2 million barrels. Gasoline stocks continue to build due to weak consumer demand, while middle distillate stocks continue to fall due to limited economic growth, more air travel, and larger US distillate exports.

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Peak Oil Versus Peak Exports, By: Jeffrey J. Brown & Samuel Foucher, PhD

At the recent (2010) ASPO-USA conference, we reviewed, in our presentation on net oil exports, two examples of production peaks in oil producing regions. We also reviewed “Net Export Math” and we looked at some examples of net export declines. Finally, we reviewed our projections for net oil exports from the top five net oil exporters in 2005, followed by two scenarios for global net oil exports. In this paper we will briefly review the highlights of our presentation.

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Review October 18, 2010

After climbing from a trading range in the low to mid $70s in late September, oil prices have remained in the low $80s for the past three weeks – closing at $81.25 on Friday. Much of the daily oil price movements are tied to the dollar rather than news concerning the oil markets. Opinions are mixed as to whether a possible resumption of “quantitative easing” will or will not help the US economy recover. Some believe the $10 a barrel increase in oil’s trading range during the past month is an overreaction to the prospects for economic growth.

The fundamental question remains as to whether demand for oil from China, India, and the oil exporting nations will be so strong over the next two years that it outruns sluggish or possibly falling demand from the OECD countries and begins to drain global stockpiles. Last week there were a number of reports and developments that bear on this issue.

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Review October 11, 2010

Prices moved higher last week, at one point trading above $84 a barrel, before closing on Friday at $82.66. Analysts attributed the move to a weaker dollar and the French oil port strike that has been going on for the past two weeks. A weak US jobs report on Friday sent prices down to the vicinity of $80 a barrel, but continued weakness in the dollar brought it back. Analysts now believe that the jobs report will force the US Federal Reserve to begin “monetary easing” once again, resulting in a still weaker dollar and higher oil prices.

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A review of The Impending World Energy Mess, By Robert Hirsch, Roger Bezdek, and Robert Wendling

Five years ago Robert Hirsch headed the team that produced the first US government-sponsored report discussing the consequences of declining world oil production. The team which wrote the original report, Peaking of World Oil Production: Impacts, Mitigation, & Risk Management, is now out with a book that discusses the current state of the world energy situation and what we can expect in the decades ahead. Developments during the last five years have sharpened the team’s appreciation of the imminence of the coming decline in world oil production. The first report, written five years ago, discussed what could be done to mitigate the situation if steps were taken 20 and 10 years before the decline in oil production started.

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