I’m a rich environmentalist who thinks the green movement often goes too far.  So I’m happy to see that advocates for the poor are starting to put their oars in the water to limit the influence of the environmental lobby.  Clearly higher oil prices hurt the poor disproportionately.  Now the poor are fighting policies that may raise oil prices. Take ANWR as an example.  If there are any environmentalists who actually go to northern Alaska to enjoy the natural beauty, you can bet they are wealthy.  People living in the …

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This story may not impact the price of oil in the near term but some day it may bite.  It’s a useful construct for understanding what is happening in the geo-politics of oil, which is vital since above-ground conditions increasingly determine how much oil reaches OECD markets. Here is the short version:    1. A great deal of future potential oil flows lie offshore Africa.    2. Shipments of oil from Nigeria are attracting pirates.  Bandits who are internal to Nigeria are also stealing much …

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This Winter could bring a good deal of economic strain to the roughly 8 million homes heating with oil.  The cost of natural gas heat is less than half that of oil, so that should push a fair amount of conversion from oil to gas.  Last year, about half of all U.S. households, 54 million, heat with gas.  As the report below from the Wall Street Journal states, “I don’t see any way to make the numbers work for middle-income people,” he says, adding, “They’re already …

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Jeff Rubin, the Wall Street oil analyst who is closest to getting the reality of oil in my opinion, published this piece recently.   He predicts an average oil price of $150 in 2009 and $200 in 2010.  He also says 10 million Americans, mostly poor Americans, will give up owning a car by 2012.  I believe that would be called “demand destruction.”

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  WASHINGTON (Reuters) - Surging food and fuel prices have pushed some countries to a “tipping point,” the head of the International Monetary Fund warned on Tuesday, threatening hard-won efforts in many African countries to stabilize their economies. “If food prices rise further and oil prices just stay the same, then some governments will be unable to feed people and at the same time maintain stability in their economy,” said Dominique Strauss-Kahn, managing director of the IMF. “They need good policy options and they need help from the international community,” …

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IMF warns of threat to poorer nations By Javier Blas in London Published: July 1 2008 22:30 | Last updated: July 1 2008 22:30 The rise in food and oil prices could “severely weaken” the economies of up to 75 developing countries, including Pakistan and Indonesia, the International Monetary Fund said on Tuesday in its first broad assessment of the crisis. Dominique Strauss-Kahn, IMF managing-director, warned that some countries were now at “a tipping point” because of the double impact of rising food and oil prices. He …

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The report posted below describing the unfortunate scene in Bangladesh after  conversion of many vehicles from gasoline to natural gas is notable on a number of levels.  First, it’s a good example how demand for oil is being destroyed by high oil prices in poor countries.  No doubt similar changes are happening in many countries and to millions of people around the world as they adjust to use less oil.  The oil that was formerly used in Bangladesh is now being used in China or some other growing economy, probably …

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Much of this letter is about the economy and the stock market because both were front page news for much of the past month. Oil is not much in focus for the investing public. Oil has tended to rise in price when the focus is elsewhere.

Macro Economy

There is little question that the U.S. economy is falling into the pooper. It is going down with the consumer and with the price of her home. It won’t be saved by any bailout that has or will be passed …

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Below is a thought provoking and data-supported discussion of recent oil demand destruction.  It posits the question of whether it is really poor countries or rich ones that are being priced out of oil usage.  It does not - and probably could not - distinguish between the poor and not-poor people within each country who are being effected, so to some extent the discussion is theoretical as to whether demand destruction is hitting the world’s poor or not poor people.  But if you are interested in questions relating to the sociology of peak oil, you might want to read …

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read full article

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They seek government help.  This is the wave of the future. read entire article

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Surging petrol prices in Africa usually weigh most heavily on the emerging urban middle class, making it a struggle to put fuel in cars or motorbikes every day and to pay home electricity bills. In Senegal, the energy shock is starting to filter down to the most isolated rural areas, where, far from electricity grids and roads, illiterate parents hoping their children will have a better life through education are worrying about how to put fuel in oil lamps so their children can do their …

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Here is a list of countries with reported energy shortages occurring within the past few months.   While Americans and Europeans may grumble about paying more to fill up their comfortable vehicles, a lot of people in poorer areas are sweltering in heat, freezing in the cold, reading by candlelight, and having trouble getting to work, if their place of work is still in operation. We are just beginning to see the early demand destruction that will surely accelerate as fossil fuels start to become supply constrained.    •  List …

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because their economies are more oil-intensive than rich countries. read full article

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read entire article

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