Comment: Login required for full article, which is quite lengthy. Ed Crooks writes regularly on energy/oil issues for the FT, and you can tell - a well written article. Ed’s article gives the impression that with the publication of the latest IEA MT-OMR last week (IEA Medium Term Oil Market Report, July 2007, PDF, 1.87 Mb), and the NPC report this week, it is now ok to start talking about / reporting on the coming energy crunches. Whether or not the general public notices and the politicians start taking action is another matter.

Article: Wednesday’s report on world oil and gas supplies from the US National Petroleum Council was a defining moment in the history of the global energy industry.

The study, calling on the US to implement such radical measures as the fastest technically possible increase in vehicle fuel economy standards and an international framework for managing carbon dioxide emissions, echoed familiar demands from environmental campaigners.

… The NPC proposals have crystallised the unease about global energy supplies that has been accumulating over the past couple of years. What they demonstrate, in the most comprehensive way yet, is not that the world is running out of oil and gas but that we are in for a sustained period of tight supply – and that policy needs to start responding to that right now.

… Ahead of its publication, the report was criticised for not taking seriously enough the case for “peak oil”: the argument that the world’s oil production is close to or has passed its peak. But the core message of the 646-page study sounds far from complacent. It argues that there are mounting risks to traditional sources of oil and gas supply that “create significant challenges to meeting projected energy demand” and stresses the urgent need to mitigate those risks.

… Goldman Sachs suggested that the price could go to $95 by winter. It is certainly possible, although no one should put too much faith in any particular figure: the price of oil has long made fools of those who try to forecast it. In 1980, when it broke through $40 a barrel, people said it would go to $100. In 1999, when it fell below $11, there were those who said it would retreat to $5. What has become increasingly clear, however, is that the world is moving into a new era in which the balance of supply and demand for oil will be tighter than in the past. That is likely to mean that prices will be both higher and more volatile in the future.

… But China is on the verge of a level of income where car ownership is set to soar: at present it has just one car per 40 people compared with a car for every two people in the US.

While oil demand seems set to keep growing, the outlook for oil supply is murky. International oil companies such as Exxon, Royal Dutch Shell and BP, which have the most advanced technology and capabilities for extracting oil and gas, are finding it increasingly difficult to operate. They control just 6 per cent of the world’s reserves and most of the countries where oil is plentiful are either closed to them or present daunting problems. The territories that are their traditional bases – Britain, Norway, onshore US – are in relatively steep decline.

… Their problems are compounded by shortages of steel, equipment and skilled personnel, which have sent development costs soaring. As a result, the IEA expects non-Opec oil output to grow by an average of just 1 per cent a year during 2007-12.

... In the longer term, it seems likely that prices will fall once again. Eventually, a sustained high price of oil creates changes on both the demand and supply side of the equation. Cars, trucks and aircraft are designed to be more fuel-efficient, industrial processes are re-engineered and power generation turns to other fuels. On the supply side, higher long-term assumptions about prices change the economics of costly investment projects and research programmes. Oil companies typically test the economics of their investment plans down to $30 a barrel oil and want to be comfortable at $40. Those planning assumptions are likely to be revised upwards.

Eventually, the companies will be able to recruit and train the engineers, geologists and other skilled staff that they want and the shortage of equipment such as drilling rigs will ease: the industry is in the middle of a construction boom, with old facilities not used for decades being reopened. Alternative sources of fuels including “unconventional” oil from regions such as Canada’s oil sands also become more attractive, as do biofuels.

... In the meantime, there is plenty of scope for the oil market to cause economic and social disruption. The situation is made more serious because the outlook for natural gas, which can be a substitute for oil for some uses, also looks likely to tighten. Hence the urgency in the recommendations from the NPC, an industry advisory group to the US administration first convened under Franklin D. Roosevelt during the second world war. Its answer, drawn up by a 350-strong study group including governments, other industries and consultants as well as oil and gas executives, is that “actions must be initiated now and sustained over the long term”; in effect, to accelerate that process of adjustment to a tighter market for oil.

...Even if all its recommendations were adopted, the NPC says the US could do no more than cut its dependence on imported oil by one-third by 2030. Many of its proposals will be found controversial, by the motor industry on one side and environmentalists on the other. But the NPC is urging policymakers to take its whole package on board.

As John Guy, the deputy executive director of the NPC, puts it: “It’s not a Chinese restaurant menu: you cannot pick some measures and not others. What we keep saying is that you’ve really got to do them all.”

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2a/ Bernanke promises to fight back as sub-prime loans crisis deepens (The Times, Thu 19 Jul)

http://business.timesonline.co.uk/tol/business/economics/article2099925.ece

Comment: “Ben Bernanke, the Chairman of the US Federal Reserve, pledged to crack down on lax mortgage lending yesterday…” – A bit late. And why have he and his predecessor been turning a blind eye to such dodgy lending practices in the first place?

Article: Ben Bernanke, the Chairman of the US Federal Reserve, pledged to crack down on lax mortgage lending yesterday as JPMorgan Chase became the latest bank to react to the effects of defaults on home loans in America.

Mr Bernanke bowed to sustained pressure from Congress and said that he would introduce new rules to cut down on the kind of “predatory” practices that had resulted in home loans being made to high-risk borrowers and prompted a surge in mortgage defaults.

... He blamed “abusive lending practices and outright fraud” for dragging down the housing sector and, in turn, hurting the American economy.

... Mr Bernanke’s comments came as JPMorgan said that it had set aside $1.53 billion (£745 million) for loan losses in the second quarter, up from $493 million the year before, as even perceived low-risk borrowers with strong credit histories were defaulting on home loans.

Mike Cavanagh, JPMorgan’s chief financial officer, said that the declining fortunes of the housing market were “definitely a change in trend that we’re reacting to”.

Bear Stearns was confirmed as Wall Street’s biggest victim of America’s mortgage woes yesterday, as the extent of the losses made on two of its hedge funds was quantified for the first time.

One highly leveraged Bear Stearns hedge fund, heavily invested in bonds backed by sub-prime mortgages, has lost all the $638 million of equity that it had on March 31. The other has lost 91 per cent of its $925 million in equity. The vast majority of the hedge funds’ losses look likely to be borne by their third-party investors, rather than by Bear Stearns. Analysts said that they had done the bank’s reputation considerable harm.

America’s sub-prime mortgage meltdown is spreading beyond the housing market as it makes lenders increasingly nervous about backing leveraged buyouts, which they perceive as similarly risky investments. George Roberts, a co-founder of Kohlberg Kravis Roberts, became the latest senior private equity executive to acknowledge that the industry’s best days may be behind it as several years of easy credit give way to a credit crunch...

2b/ Bernanke says sub-prime defaults may hit $100bn (The Times, Fri 20 Jul)

http://business.timesonline.co.uk/tol/business/economics/article2106615.ece

Comment: Further into the article: “could reach $100 billion, before hinting that the eventual losses may be higher still” How much higher?

Article: Ben Bernanke, the Chairman of the US Federal Reserve, gave warning yesterday that the total loss from defaults on American sub-prime mortgages could eventually reach $100 billion (£49 billion) and indicated that banks needed to devalue further the bonds backed by these high-risk home loans.

... Mr Bernanke said that losses relating to mortgages, which include bonds backed by home-loan repayments, could reach $100 billion, before hinting that the eventual losses may be higher still.

... At about the time that Mr Bernanke was speaking, Standard & Poor’s said that it had cut its rating on a further 418 mortgage-backed securities, worth about $3.8 billion, in some cases by as many as eight notches.

... S&P added that it expects that second-lien loan losses “will significantly exceed historical precedent” and will be much higher than its previous forecasts.

Sub-prime jitters continued to fuel speculation that more hedge funds were running into difficulties.

One London-based fund-of-hedge-funds manager said that if well-regarded hedge fund managers such as Bear Stearns and Dillon Read Capital Management could get into trouble, there were bound to be others.

He added: “There is extreme angst among the prime brokers [investment banks providing finance and dealing services to hedge funds].”

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3a/ Nuclear crisis in Japan as scientists reveal quake threat to power plants (The Times, Fri 19 Jul)

http://www.timesonline.co.uk/tol/news/world/asia/article2096238.ece

Comment: It will be very interesting to see how this potential disaster for Japan plays out this year. Japan is very dependent on nuclear energy and up to a third of its plants may be shut down whilst checks are carried out. If the nukes are shut down, then, not mentioned in the article, Japan will probably go hell for leather with its natural gas and coal-fired power stations, perhaps adding pressure to the spot price of LNG. What is very, very odd is where they built some of the nukes – directly above active fault zones. A bit like the UK trend to build new houses in flood zones – we still do that.

Article: The world’s biggest nuclear power station stands directly above an active earthquake faultline, which provoked an atomic spill this week, seismologists revealed yesterday.

The disclosure that the Kashiwazaki plant was prone to further earthquake damage threw Japan’s nuclear industry into crisis as seismologists recommended that up to a third of the country’s 55 atomic power stations should be closed for inspection.

In addition to the seismic threat to the Kashiwazaki plant, scientists identified an active threat to one of Japan’s oldest nuclear power stations and demanded that it should be closed immediately.

... The precarious state of the Kashiwazaki plant was underscored by an earthquake on Monday that knocked over hundreds of drums of nuclear waste, many of which split open during the tremors. The town’s mayor ordered all activity at the power station to be suspended indefinitely. It was shut down temporarily during the quake.

The suspension, and the threat of widespread disruption to nuclear plants around the country, was likely to herald “a hot summer of blackouts” in parts of central Japan, according to energy analysts. The power shortages would affect factories and businesses across the region. Japan, which has almost no oil or gas reserves, generates 33 per cent of its electricity in nuclear power stations, but the Government hopes to increase this to 40 per cent by 2010.

... The chaotic response by the Tokyo Electric Power Company (Tepco) to the earthquake and its after-effects prompted Mohamed ElBaradei, the Director-General of the International Atomic Energy Agency, to demand that Japan should conduct a full examination of the plant. “Japan needs to go into full investigation of the structure, of the systems, of the components of the reactor,” he said, offering to send a team of IAEA experts to assist.

Reflecting growing concerns that Tepco may be unaware of or has concealed the extent of the damage at Kashiwazaki, Dr ElBaradei added: “I would hope that Japan would be fully transparent in its investigation of the accident.” The catalogue of problems so far discovered by investigators at Kashiwazaki includes several leaks of radioactive materials, a fire, and the toppling of 438 drums of low-level radioactive waste. Hiroshi Aida, the Mayor of Kashiwazaki, said that his staff’s own investigation had found that the ground on which the plant was built had been distorted and suffered several cave-ins…

3b/ Japan's six electric utilities tell Tepco they can supply power (Platts, Fri 20 Jul)

http://www.platts.com/Electric%20Power/News/8168198.xml?p=Electric%20Power/News&sub=Electric%20Power?src=energybulletin

Comment: It is not clear from this article if the other power companies can supply enough electricity to avoid shortages.

Article: Japan's six electric utilities told Tokyo Electric Power Company Thursday that they could supply the largest power utility in the country with electricity, sources from the power utilities said Friday.

The six companies are Tohoku, Chubu, Kansai, Chugoku, Shikoku and Kyushu. Hokkaido and Hokuriku will not supply Tepco since they don't have extra capacity to support Tepco. Sources from the six companies declined to comment on the volume and the supply period.

An earthquake on July 16 led to the shutting of operations at Tepco's Kashiwazaki-Kariwa plant with a capacity of 8.212 GW over seven units. The shutdown -- which analysts expect to last six months to a year -- has knocked off close to half of the company's nuclear power generation capacity of 17.31 GW, and one-sixth of the country's total nuclear capacity of 49.47 GW. Tepco asked the six utilities July 18 for electricity to meet the summer demand.

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4/ Three contrasting articles, one quoting the IEA’s Medium Term OMR July 2007, two the US NPC report released last Wednesday

Comment: The IEA’s Medium Term Oil Market Report July 2007 left little room for doubt – global oil demand will outstrip supply between now and 2012. Jim Jubak (Item 5a) with MSN Money says there is now little to distinguish Peak Oil forecasts with that of the IEA, at least for the next 5-10 years. The Investor’s Daily article from Thursday’s CNN Money (Item 5b) in contrast uses Wednesday’s US National Petroleum Council report to suggest, to all intents and purposes, all is rosy and the Peak Oil community do not know what they are talking about. Of course, to write such nonsense required ignoring the IEA’s report. Note that item 5b does mention the IEA, just not the MT-OMR July 2007 report. Note also the hint that the Canadians are not pulling their weight. Item 5c also quotes the US NPC but as it is written by Geoffrey Lean of the Independent, the UK’s leading Peak Oil journalist - it interprets the NPC as forecasting nothing short of disaster.

4a/ The oil squeeze has just begun (MSN Money, Tue 17 Jul)

http://articles.moneycentral.msn.com/Investing/JubaksJournal/TheOilSqueezeHasJustBegun.aspx

Comment: Jim Jubak is a financial adviser has written briefly on Peak Oil / oil depletion before. Here he expands his thoughts in light of the International Energy Agency's Medium Term Oil Market Report (PDF, 1.87Mb) that was released last week. He concludes that the forecasts of the IEA and the Peak Oilers are now more or less the same, at least for the next 5-10 years anyway:

Article: "World will face oil crunch in five years." That's not exactly the kind of headline you want to read when crude oil is already at $73 a barrel. When things are this bad -- crude prices are up 12% in the past two months as of July 12 -- you don't want to hear that they're going to get worse. Yet that's exactly what consumers -- and investors -- should expect, the International Energy Agency said in its latest Medium-Term Oil Market Report, issued July 9. The market for oil will get even tighter over the next five years. (And in case you're looking for a way out, natural-gas markets may be even tighter.) As much as I'd like to believe that the agency has made a mistake, the logic behind its pessimistic assessment of supply and demand is impeccable. Let me explain what is leading to the squeeze that will be so painful over the next five years, and then I'll give you my pick for the oil stock that's best positioned for this scenario.

...But the debate over an exact [Peak Oil] date is largely beside the point. Peak oil, a theory put forward by American oil geologist King Hubbert, describes what will happen as the world moves toward a peak in oil production from conventional sources. Big fields will decline -- at first gently and then rapidly. New finds will become smaller. Finding new oil will become more difficult and more expensive. Producing oil from declining older fields and from these "geologically challenged" new fields will be more difficult and more expensive. The marginal cost of each additional barrel of supply will climb even as it becomes more and more difficult to add enough new barrels to keep production growing.

...But all of this means that we're replacing the cheap oil of the 1990s with expensive oil…

4b/ Keeping Our Motor Running (CNN Money, Thu 19 Jul)

http://money.cnn.com/news/newsfeeds/articles/newstex/IBD-0001-18270948.htm

Comment: Propaganda. The first paragraph really ought to make you laugh.

Article: Energy: Experts inside the oil industry have assessed the situation, and their outlook for the future is rather bright. Unlike those on the outside, these are the people who know what they're talking about.

Naturally, the headlines topping stories about the 422-page report released Wednesday by the National Petroleum Council are far bleaker than the study's contents. Most focused gloomily on the report's projection of rising energy demand.

Yes, an increase in demand has to be addressed. But is that the main message the public should be taking away? What about this affirming statement from the 40-page summary: "Fortunately, the world is not running out of energy resources."

This runs counter to estimates by the ever-pessimistic Association for the Study of Peak Oil. It sees output falling to about 80 million barrels a day in 2030 after topping out at around 90 million in 2015.

But the petroleum council, citing the Energy Information Administration and International Energy (OOTC:ILGL) Agency, expects 2030 production to be closer to 120 million barrels. And the "aggregated proprietary forecasts from international oil companies and energy consulting groups" put the number at about 105 million.

The real problem, according to the council, is getting to the energy resources and putting them to use. Maybe that's why its study is titled "Facing the Hard Truths About Energy." The hard truth is not that we're running out of oil, it's that the hurdles to development and use, most of them artificial, are high.

Included in the NPC's list of "accumulating risks" that threaten to choke energy production are: increased geopolitical barriers, inflation in costs, fewer petroleum engineers and growing restrictions on carbon dioxide emissions.

Unlike a real scarcity, all of these can be overcome, however, with common-sense policies.

... "Peak oil" advocates -- who believe that oil output has peaked, or soon will, and an inevitable decline will set in -- have their own agenda. It doesn't include raising output, because they're not in favor of anything that might prove them wrong.

... "Another estimated 11 billion barrels of oil resources and 51 trillion cubic feet of natural gas resources are restricted in Canada." it said.

Finally, for those who carp that the NPC report was written predominantly by energy industry insiders and is therefore biased -- "Some of the report's conclusions would hardly seem surprising given the authors," wrote a New York Times reporter -- need to remember one thing:

Those insiders understand their field because they live it every day. Despite the "experts" on the outside who think they have all the answers, there are no more authoritative voices than those inside the industry.

Policymakers should listen to them, particularly when they talk about the resources in our neighborhood that are sitting untapped.

4c/ Oil and gas may run short by 2015, say industry experts (The Independent on Sunday, Sun 22 Jul)

http://environment.independent.co.uk/climate_change/article2790960.ece

Comment: Written by Geoffrey Lean of The Independent, the UK’s leading Peak Oil journalist.

Article: Humanity is approaching an unprecedented crisis when not enough oil and gas will be produced to keep industrial civilisation running, the world's top oilmen warned last week.

The warning – which is being hailed as a "tipping point" on both sides of the Atlantic – marks the first time that the industry has accepted that it may soon no longer be able to meet demand for its products. In Facing the Hard Truths about Energy, it gives authoritative support to concern about impending shortages, following a similar alert by the International Energy Agency less than two weeks ago.

The 420-page report, the most comprehensive study ever carried out into the industry, has been produced by the National Petroleum Council, a body of 175 authorities that reports to the US government. It includes the heads of the world's big oil companies including ExxonMobil, Chevron, ConocoPhillips, Occidental Petroleum, Shell and BP.

It is also remarkable for the conversion of its chairman, Lee Raymond, the recently retired chief executive of ExxonMobil, who led opposition against action to tackle global warming, and became environmentalists' most prominent bogeyman. The report argues for "an effective global framework" to manage emissions of carbon dioxide – "incorporating all major emitters" – and urges the US to cut the pollution that causes climate change.

The report concludes that "the global supply of oil and natural gas from the conventional sources ... is unlikely to meet ... growth in demand over the next 25 years". It says that "many observers think that 80 per cent of existing oil production will need to be replaced by 2030" to keep up present supplies "in addition to volumes required to meet existing demand." But, it adds, there are "accumulating risks to replacing current production and increasing supplies".

Though vast amounts of oil and gas remain underground, "complex challenges" and "global uncertainties" are likely to put an end to "the sufficient, reliable and economic energy supplies upon which people depend". And the crunch could come sooner, with oil production becoming "a significant challenge as early as 2015". This chimes with the International Energy Agency's prediction that oil supplies could become "extremely tight" in five years.

The predictions should send a shiver down humanity's collective spine as a shortage of oil and gas has been predicted to cause industrial collapse, market crashes, resource wars and a rise in poverty. Some forecast that fascist regimes will rise out of the chaos.

Chris Skrebowski, editor of the Energy Institute's Petroleum Review, said the report's publication showed the industry "'fessing up that it really has a problem on its hands". Until now, he said, "companies, full of share options, have been terrified of frightening the markets" by revealing the truth.

The report says the fuel efficiency of cars should be increased "at the maximum rate possible" and there should be a crackdown on 4x4s. It calls for "aggressive energy efficiency standards for buildings, and measures to "set an effective cost for emitting carbon dioxide" to combat global warming.

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5a/ China booms … we pay the price (The Sunday Herald [Scotland], Sun 15 Jul)

http://www.sundayherald.com/business/businessnews/display.var.1546237.0.china_booms_we_pay_the_price.php

Comment: The Herald/ Sunday Herald published all sorts of articles during 2003 on why the UK/USA invaded Iraq, but avoided Peak Oil / oil depletion like the plague and has done ever since, with the exception of one article by columnist Alf Young (“Fog of war obscures way ahead for black gold”, July 18 2006. Article no longer available on SH website). It is therefore about time that the SH tackled Peak Oil / oil depletion, although avoids use of the key words ‘Peak Oil’ and ‘depletion’, and lacks any sense of urgency.

“those who think a quid a gallon at the pump” – I think the journalist meant a quid [pound] a ‘litre’

Article: ALL OF those cheaply produced goods from China-everything fromNikerunning shoes to electric kettles - are coming home to roostrightherein Britain. As factories multiply there to satisfy the Western world's insatiable demand for consumer goods, they use ever-increasing volumes of fuel.

The result is a coming oil crunch that will force up the price of fuel for cars, trains and planes, for home heating, for our own (diminishing) stock of factories and even the cost of money in the form of interest rates.

Judging by the latest figures from a variety of sources, those who think a quid a gallon at the pump makes motoring more of a luxury than a necessity ain't seen nothing yet.

The industrialised countries' energy watchdog,theInternationalEnergy Agency, delivered a blunt warning last week of a global shortage of oil within five years that will push prices to record levels and in the process render the West even more dependent on oil cartel Opec.

According to the IEA, which has a reputation for painstaking objectivity, "oil looks extremely tight in five years' time" with strong prospects of "even tighter natural gas markets" emerging even sooner, probably by 2010...

5b/ Disaster at the end of the cheap energy era [Letters] (The Herald, Mon 16 Jul)

http://www.theherald.co.uk/features/letters/display.var.1546697.0.0.php

Comment: During 2003, when the UK/USA invaded Iraq, I wrote several letters to the Herald / Sunday Herald about Peak Oil / oil depletion, none of which were published (whereas the Edinburgh Evening News published all on the theme of Peak Oil, bar one). They seem to have changed their policy.

Article: While warning signs are appearing of associated crises in the rapidly rising Third World populations and the rising prices for diminishing world resources of food and raw materials, the International Energy Authority has belatedly accepted the reality of peak oil and the fearful impact this will have on the future of the world.

The devastating nature of this issue is that humanity has used up half of the world's oil reserves, with the remaining half overwhelmingly lower in quality and in less accessible fields.

To counter the threat of rapidly rising oil prices, now exacerbated by the aggressive industrial intrusion of China and India, America is leading the field in the production of biofuels, sanctified by the dubious rationale of Al Gore and others hell-bent on reducing, if they can, human carbon emissions. How they will achieve this as China, India and the Far East industrialise further without a thought of carbon-emission control shows how falsely rooted are their efforts. The West has lost more than its geographical empires; it has lost its moral imperatives, and the great new industrial powers in the east are just not listening.

In the US, which supplies 65% of other countries' grain imports, 30% of next year's harvest has been designated for the production of ethanol for motor fuel. The outcome of this is that the rich countries' demands for biofuels are reducing the world's supply of food and increasing its price. As a shadow of coming events there were riots in Mexico in January by poor workers who had seen a fourfold increase in the price of maize by reason of the farming of industrial corn in place of food corn.

The cheap energy era is over. The scarcity of one commodity will beget another and the inevitable price rises on human necessities will impinge on the world's poorest, making food so scarce as to reduce the rate of human population growth.

The fatal consequence for the west is that a starving Third World will not submissively accept its fate but, rallying behind a militant leadership, will storm the citadels of the possessor nations. It has not escaped the notice of many that this inevitable process is under way.

Alastair Harper, House of Gask, Lathalmond, by Dunfermline.

5c/ Oil companies see profits soar … but warn production cannot meet demand (The Sunday Herald [Scotland], Sun 22 Jul)

http://www.sundayherald.com/business/businessnews/display.var.1563303.0.oil_companies_see_profits_soar_but_warn_production_cannot_meet_demand.php

Comment: Focuses on Big Oil’s inability to keep up oil production.

Article: OIL GIANTS BP, Shell and Exxon will heighten fears that petrol prices are set to jump the £1-a-litre barrel barrier this week when they are all expected to admit that their production is failing to keep pace with surging global demand.

Their message will reinforce the recent stark warning from the International Energy Agency that there could be oil industry shortages stretching up to 2012 despite the vast sums now being spent on exploration and development.

For once the disappointing news on output could overshadow the level of profits the companies are earning even though Exxon, for example, is expected to announce second quarter earnings of approaching $11 billion (£5.5bn) which is the highest ever earned by a single company in such a short period.

Royal Dutch Shell is forecast to announce a profits increase from $6.3bn to around $6.8bn for the same three months on Thursday although BP is expected to disclose a slippage from $6.1bn to $5.1bn on Tuesday.

With the exception of BP, the increased profits are down to higher margins on sales rather than increased output.

... The oil companies are expected to blame various outside factors for the disappointing production levels, including falling output from the North Sea, terrorism in Nigeria and Iraq and political interference in Venezuela, as well as restrictions by the Organisation of the Petroleum Exporting Countries.

They aim to boost production in future years through a heavy investment programme with BP and Shell earmarking approaching $40bn for capital spending between them this year.

Large sums have also been set aside by the companies for investment in alternative energy sources, such as biofuels and windfarms.

But analyst Paul Hichens at Teather & Greenwood believes that the giant companies are now paying the price for the drive for efficiency - and profits - following the mega-mergers that swept the industry in the 1990s. These included the Exxon takeover of Mobil and BP's acquisition of Amoco.

"The drive for rationalisation removed whole tiers of production expertise and the oil companies did not really resume recruitment until around 2004," he said. "As a result the average age of all oil service managers is now around 54 while the average age of a North Sea diver is 49.

"The shortage of expertise places a limit on just what can be done and I fear that companies will have to run hard to stand still on the production front for some time to come." ...

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6/ UK needs a two-child limit, says population report (The Guardian, Wed 11 Jul)

http://society.guardian.co.uk/children/story/0,,2123344,00.html

Comment: Homosapiens need to get their numbers sorted, otherwise Peak Oil, Peak Gas and Peak Coal will do the sorting for us. The principal problem here is that while groups like the Optimum Population Trust, the focus of this article, try their best to come up with the best proposals possible, society in general is at best not interested, and at worst outright hostile, with accusations of fascism, racism and anti-whatever-religion. Peak oil/gas/coal will not be kind to us with these prevalent attitudes.

Article: Families should restrict themselves to having a maximum of two children to stabilise the effect on the environment of Britain's rapidly growing population, a thinktank warns today.

According to the Optimum Population Trust, Britain's rising birth rate, currently growing at the highest rate for nearly 30 years, should be considered an environmental liability.

"Each new UK birth, through the inevitable resource consumption and pollution that UK affluence generates, is responsible for about 160 times as much climate-related environmental damage as a new birth in Ethiopia, or 35 times as much as a new birth in Bangladesh," the report says.

It calls on the government to introduce a "stop at two children" or "have one child less" guideline and to review incentives that may lead some teenage girls to become pregnant.

"A voluntary stop-at-two guideline should be adopted for couples in the UK who want to adopt greener lifestyles. It would aim to set an example," it says.

The author of the report, John Guillebaud, professor of family planning and reproductive health at University College, London, made the call after figures from the office of national statistics showed 669,531 babies were born in Britain last year, with the UK having the highest teenage pregnancy rate in western Europe.

While most of Britain's annual population rise of nearly 300,000 people is from immigration, only 21.9% of new births were last year to non-UK born mothers, says Prof Guillebaud. Each woman in England and Wales, he says, can now be expected to have 1.87 children, the highest total fertility rate for 26 years.

Unless action is taken the UK population will grow by a further 10 million by 2074, says the report.

"UK population has grown by 20% since 1950 - in less than a lifetime. There are more than 60 million people now living in the UK, one of the most densely populated countries in the world, and our numbers are rising faster than ever before.

"UK population is growing by the equivalent of a city larger than Cardiff every year."

Voluntary population stabilisation programmes have a proven record of success, says Prof Guillebaud. "A voluntary 'two-child' population policy in Iran, for example, succeeded in halving fertility in eight years, as fast a rate of decrease as that of China, whose much-criticised one-child policy began in 1980."

But Dr Guillebaud says the NHS must take much of the blame for not limiting unwanted teenage pregnancies. "This is ... related to the disastrous trend ... for primary care trusts to shut down community family planning clinics."...

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7/ Looting, panic buying - and a water shortage (The Times, Mon 23 Jul)

http://www.timesonline.co.uk/tol/news/uk/article2120922.ece

Comment: The UK (west central England to be exact) has had its worst floods for decades. Something about this article reminds me of New Orleans after Hurricane Katrina, but I can’t quite put my finger on it. Presumably there are lessons to be learnt here regarding preparation for Peak Oil / Gas / Coal.

Article: Food and drinking water shortages, panic buying and the threat of looting have followed the worst flooding to hit England in 60 years.

Amid concerns that the government-run Environment Agency acted far too slowly in responding to serious flood alerts from the Met Office, parts of the West Country woke up this morning to another day under water and the Thames Valley now faces being inundated.

An estimated 90,000 gallons of water a second was surging down the swollen River Thames last night towards Oxford, Reading and Windsor.

The Environment Agency fears that the Thames Valley area will now suffer a similar fate to Gloucestershire, Worcestershire and Warwickshire, where flooding has bought misery to thousands of people. Opposition MPs are seeking an emergency statement from the Government today.

The Times has learnt that the Ministry of Defence was unwilling to supply lorries and drivers without being guaranteed payment for their services.

... Sir Michael Spicer, the Conservative MP for West Worcestershire, called for an emergency Commons statement. “I do not know why the Met Office advice was not acted upon more immediately by the Environment Agency and why they could not secure the necessary equipment and manpower to be in place,” he said.

He was particularly concerned about Upton-upon-Severn and the failure by the agency to install temporary flood defences. He said: “The defences were kept in Kidderminster, which is about 20 miles away, but in exceptional weather they could not get through on the roads. I think there is a case for keeping flood defences inside or near the towns which need them.”...

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