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http://www.fcnp.com/commentary/national/9081-the-peak-oil-crisis-dimming-of-the-globe.html

The peak oil crisis: Dimming of the globe

Late last month a newly enhanced web site, www.energyshortage.org, dedicated to collecting articles concerning energy shortages around the world reappeared on the web after an absence of some months. The stories deal with coal, electricity and natural gas shortages as well as oil. In the course of the past month the web site has located and linked to nearly 200 stories that deal with some aspect of the developing global energy shortage. Most of these stories come from local paper and taken together paint a distressing picture of looming societal breakdown in many parts of the world that is not as yet generally appreciated by the public.

Most of the problems reported on deal with electricity shortages - which in several countries have deteriorated to the point where economies are threatened with collapse. In South Asia - Pakistan, Bangladesh, Nepal, and later in India - a combination of too many people, hydro-power reducing droughts, depleting fossil fuel reserves and inadequate investment in infrastructure raises the possibility that many urban areas may soon be uninhabitable.

In Pakistan the electricity is now turned off for 18-20 hours some days in many cities and 20 hours in rural villages. The onset of summer temperatures, shortages of fuel oil for thermal generation and falling water levels have increased the power shortfall to record levels. Without electricity to run the pumps urban water supplies quickly shut down. Without power to run the mills, exports are falling, leaving the country without money to import oil. In short we are seeing a classical downward spiral. The lack of electricity to sell is creating serious hardships for electricity companies which can no longer afford to pay for energy - coal, oil, or natural gas - and are being shut off by suppliers.

Pakistan is hoping that increased imports of liquefied natural gas which is for now is relatively plentiful, transportable, and affordable will be a short term solution for economic survival. Over the longer run natural gas pipelines from Iran and Turkmenistan may help someday provided the numerous dissident groups in the area don't blow them up. Demand for electricity in Pakistan is growing at 6-7 percent a year and all agree that building more dams is the best long term solution. This of course requires prodigious amounts of capital and the cooperation of Mother Nature to supply the necessary rains in an era of rapidly changing climatic conditions.

At the other side of the subcontinent is Bangladesh, a country of 158 million people and minimal natural resources. The country is currently generating 4,000 megawatts vs. a demand of 5,500 resulting in rolling blackouts across the country. The real problem however comes in keeping the fresh water flowing. Only half of Dhaka's 577 water pumps are equipped with back-up generators. Falling water tables and falling energy supplies suggest that major humanitarian disasters are not far away.

In the center of the sub-continent lies Nepal. Here the problem is 14 hours a day without power coupled with the inability to pay the Indian oil company for imported oil and gas. The Indians recently reduced fuel supplies to Nepal by 60 percent until the 1.25 billion rupee fuel bill is paid. There is no obvious way out of this situation.

Finally we get to India with its 1.2 billion people and 8 percent annual GDP growth. Although the country has sizeable reserves of coal, oil and natural gas, these are not adequate for a country of this size and rate of growth. Domestic coal production is not meeting the needs of a rapidly growing economy. This year the coal shortfall may be as much as 142 million tons as compared to needs. A few years from now it could be 250 million tons. Rolling blackouts have begun in some parts of the country and the projected demand for ever increasing amounts of expensive imported coal extends into the indefinite future.

China too seems to be facing coal and oil shortages this summer. Despite coal production of 3.2 billion tons a year, this is not sufficient to support the demand for electricity which is increasing at circa 11 percent a year. Beijing, of course, can afford to import all the coal, oil, and natural gas it needs and probably will. The problem will come with local shortages that may force companies to resort to emergency diesel power generation and thereby increase China's demand for imported oil.

From the underdeveloped parts of Africa, Latin America, and many island nations come a stream of reports of rolling black outs and other power shortages. Most of these problems can be attributed to the inability to pay for oil at $125 a barrel. None of these problems are going away. In many parts of the world fossil fuel energy has already become unaffordable for many and as time goes on, nearly all of us will slip into this category.

In a few places blackouts are being caused by governmental incompetence, with Venezuela at the top of the list. Despite its status as a major oil exporter, Caracas has been plagued with serious country-wide blackouts in recent days. They seem to be so bad that even the precious oil production and exports are being affected. Here the problem is not money, drought, or the availability of fuel, but government's inability to keep its national grid functioning.

With the exception of Japan, which is feeling serious consequences from the recent earthquake/tsunami/nuclear meltdown, most developed countries do not seem to be suffering any significant shortages at this time. There are of course slowly mounting problems from increasing temperatures. As summers become increasing uncomfortable, the demand for air conditioning, which consumes prodigious quantities of electricity and puts strains on even the best managed power grids, will grow. Only the richest of countries will have the capital available to rebuild power grids to meet the demands of higher temperatures. For the rest, the immediate future is likely to be one of increasing power shortages and longer blackouts.