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Mission of the York Energy Efficiency Committee

Our mission is to respond to the global warming crisis by promoting energy efficiency, alternative energy, and environmental initiatives throughout the town of York, Maine.
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[Source: The US Department of Energy's Office of Energy Efficiency and Renewable Energy (EERE)]

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The real meaning of peak oil

Peak oil is sometimes defined as the point at which the maximum rate of global petroleum extraction is reached, after which the rate of production begins to decline. Some experts believe that global peak oil will be reached by 2020; others insist that peak oil has already happened. Peak oil was reached for U.S. oil production around 1970 as the chart on the right shows.

It’s not that we’re going to run out of oil anytime soon; it’s that once all the easily-extracted oil has been used up, the cost of further production inevitably increases. That’s why oil companies are forced to drill deep under the Gulf of Mexico and in the Arctic to find new reserves.

“It is pretty clear that there is not much chance of finding any significant quantity of new cheap oil. Any new or unconventional oil is going to be expensive.”   — Lord Ron Oxburgh, a former chairman of Shell, October 2008

The graph below shows both the cost per barrel of alternate sources as well as the relative quantity of  oil available from these sources.

Graph of the Day: The Cost of Production Of Oil

Whenever we speak of Peak Oil, the optimists point out that the technology for finding replacements will turn up as the prices rise; look at what has happened with the oil sands and with shale gas. But as this graph shows, each alternative just gets more expensive.

Arguing that unconventional oil will be a good substitute for the depletion of conventional crude is like saying that human labor will serve as a good substitute for robotics…

…It means that to grow the economy for the next few decades on an oil energy base would require very high prices. But if the recessions of 1973, 1980, and 2008 have taught us anything, it is that high energy prices cause problems for the economy…

Clearly demand destruction (and a financial crisis) has the ability to lower oil prices, as prices plummeted from 140 to 30 dollars per barrel during the fall of 2008 and winter of 2009. But now, two years later, oil price is again back in the range of $90 per barrel. In a society like ours, where economic growth is touted as the solution to almost every societal problem (see more or less any op-ed on how to fund the U.S. deficit), peak oil presents a paradox: the growth of the economy requires an increasing oil supply, but increasing the oil supply, due mainly to a peak in conventional crude oil production, will require high prices which tend to undermine that growth. The billion dollar question is: at what price of oil does the economy stop growing?

Sources: The Oil Drum and Treehugger.com.

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