Category Archives: energy

236. The price of oil: 6 – Libya and the Last Oil Shock

jack-up oil rig derrick by roadsofstone‘Paradoxically, the very worst outcome [for oil prices] might not be a sudden shock, but a milder recession. If this were to create some temporary spare oil production capacity by depressing demand, … the urgency of the need to prepare for the impending peak could easily be forced off the policy agenda…

As the global peak approaches and the market tightens, any sudden interruption of oil production could [then] spark the last oil shock.’
David Strahan (2007) — The Last Oil Shock (p. 177)

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In early 2009, I described the dramatic rise and fall of the oil price associated with the financial crisis of 2008, and looked at the future oil price trends which might follow recovery through into 2010.

transocean rather deepwater semisubmersible oil rig cromarty firth scotland by roadsofstoneTwo years on, economic uncertainty remains, and a return to growth is far from guaranteed. Yet across this time, the oil price has risen steadily. From a low of $40 in February 2009, Brent crude stands at well over $120 today.

The last time when the oil price was above $100, back in 2008, the economy was still booming. Three years later, during the long aftermath of the deepest global recession for eighty years, the oil price remains close to historic highs. How can this be possible?
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234. Fukushima, Japan and nuclear power in the UK

hinkley point nuclear power station somerset england by me'nthedogs flickrThe triple shock of a huge earthquake, a devastating tsunami and an unfolding nuclear accident rocked Japan in March, and my condolences go out to all the many thousands affected.

Luckily, none of this could never happen here in Britain. Or could it?

Despite public disquiet over the safety of the industry since Three Mile Island and Chernobyl, nuclear power has regained political favour in recent years.

Amidst desperately slow progress in investing in renewables to fill a looming energy gap in the UK, successive governments have presented nuclear as a clean, cheap and proven solution which also offers zero carbon emissions.

protest at sizewell b nuclear power station suffolk uk 2002 greenpeaceFaced with public concerns after Fukushima, ministers have maintained that the UK is unlike Japan because there are no appreciable seismic risks. We do have earthquakes, but mostly they are minor.

But low seismic risk falls far short of guaranteeing safety. The more important question is whether there are risks from geological or meteorological events which could threaten the safety of our existing and future nuclear power plants. And I’m afraid the answer is a resounding yes.
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