There’s been a lot of talk about fuel prices at the moment with the opposition winning voter approval (it would seem) over it’s plans to reduce the fuel excise levy buy 5c a litre. In fact, as I mentioned earlier, the opposition seems to have finally realised that it is just that, an opposition, so a few members have even touted a 10c to 20c reduction… providing they can cost it of course.
There is the over arching feeling for me though, that in the context of climate change, it’s almost a relief to be paying more as we get closer the real cost of this fuel.
I heard Tim Flannery speak at the Communities in Control conference last week. Flannery made the point that a blanket reduction in the fuel excise is obscene. Because at the root of all these issues is the issue of equity. If you reduce the fuel excise you give everyone a tax cut, whether they are unemployed or millionaires. Where’s the equity in that?
But the elephant in the room is surely peak oil. It’s something I’ve kept my eye on since watching the film, A Crude Awakening.
What triggered this thought is these two BBC reports. The first one is interesting simply because of how vastly different the coverage is to the coverage we’ve been receiving in our local media. It actually talks about OPEC and it’s comments on Nigera are fascinating. Something I hadn’t about (although I must confess to be consuming a little less news at the moment for a variety of reasons).
Prices were also kept high by news that Nigerian oil fields operated by Chevron and Royal Dutch Shell remained shut after they were attacked last week.
The attack on Shell’s installation at Bonga, 120km (75 miles) out to sea, was the first time militants had struck at an offshore oil site, and the move cut a 10th of Nigerian oil production in one go.
This is something I’ll have to look into further but it sounds like a health dose of “get out of my country corporate pig dog” - a sentiment I can sympathise with.
The second report is an explanation of why prices are so high. It rightly points out that we don’t have a clue. But what is not discussed is the energy return on investment. Even if Oil hasn’t peaked, extraction of oil is getting harder and increasing the amount of energy required to extract it. This forces the price up. Everything I read seems to assume that it is just as easy to extract oil as it has been. But the days of enormous Oil wells is over. I suspect Oil has peaked.
If you’re interested in keeping up with the issue of Peak Oil I recommend the web site Life After the Oil Crash.
Update: and just like that the latest edition to my RSS feeds fills the gap I said I wanted filled earlier in this post. Over at Jeff Vail’s Rhizome we have Nigeria - Significance of the Bonga Attack.