Whether Hurricane Alex hits the Gulf oil spill or not, it’s only a matter of time before one will. Alex is, after all, only the first storm in a year the National Oceanic and Atmospheric Administration (NOAA) is predicting will be an abnormally active one for hurricanes.

In case you’d forgotten, blow-outs of deep-water wells aren’t the only strike against Gulf of Mexico oil production. It was just five years ago that the impact of severe hurricanes took an even heavier toll on the region.

Back then, BP and the other majors were confidently predicting that their offshore platforms could withstand all but “storm of the century” hurricanes. Those assurances turned out to be as valid as their more recent ones about the likelihood of deep-water spills. BP’S marquee Thunderhorse platform was easily toppled by Hurricane Dennis, leaving the billion-dollar rig leaning drunkenly in the waves—a premonition of worse disasters to come.

It took almost five years for Gulf production to reach to pre-Katrina levels. Consider how much longer it will take Gulf production to recover, if it ever does, from the fallout of devastation caused by a blown-out deep-water wellhead that could remain uncapped over an entire storm season as severe as that of 2005.

Even the impact of a single storm would be catastrophic, forcing BP to disconnect its containment system for a minimum of ten days, thereby allowing the unfettered discharge of 600,000 barrels. That’s a couple of spills the scale of the Exxon Valdez. And storm conditions would also suspend drilling activity of the relief wells, which are still months away from completion.

Even more devastating is the way a hurricane could disperse the existing oil slick. There have already been reports of oily rain in some locations along the coast. Imagine how many barrels of spilt oil a Category 5 storm could scoop up before it moved inland.

If raining oil on New Orleans doesn’t curb America’s appetite for crude, the resulting price shocks may. Not only do hurricanes threaten almost a third of the US’s oil production, they also jeopardize some 40 per cent of the country’s refinery capacity. That’s a double-hit to motorists at the pump.

The shut-off of Gulf production during the 2005 storm season raised oil prices by about 10 per cent, but that was only a fraction of how much pump prices rose. With refinery capacity also sidelined, crack spreads (the difference between crude prices and refined gasoline prices) went through the roof. Actual pump prices rose by 50 per cent to $3 per gallon. Three years later, when Hurricane Ike laid a direct hit on the Houston refining area, a spike in crack spreads sent gasoline prices in surrounding states to as high as $5 per gallon.

The environmental consequences of Deepwater Horizon will take millions of barrels of oil out of future production. But the hurricane season threatens to rob us of even today’s production. Between the two of them, America will no doubt be looking elsewhere to meet its energy needs.

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  • 1Eco_Indigo_1

    I think the real problem here is our social system and the desire for humans to create patriarchal structures based around the most violent and aggressive people. If people in every state of america got together and bought land as a co-operative effort, then got an industrial hemp licence and grew the hemp, even just for food and to burn in a wood stove, there wouldn't be a massive problem regarding survival. But no, beccause hemp has been demonised and suppressed to such an extent, that everyone thinks we have to build electric cars or solar powered exoskeletons. More complexity cannot be sustained.

    Everyone is sitting there and waiting for the government to magic an answer out of thin air to crude oil dependence. The answer comes from people! do you want to continue using something that you can no longer afford? its a simple answer for me.

    China has a set of principles, that while we see it as undemocratic, allows a governing body to get things done. China is getting things done because they understand that they will not survive if they don't. In the west, it appears to be just fiddle while rome burns.

  • JB

    Dear Jeff,

    Thank you for your comments.

    It also now appears that the spreading oil from the BP Macondo well may also endanger the water intake and the secondary cooling systems of all the nuclear and more conventional electrical power plants located around the Gulf coast… What will happen if they have to shut down?

    In addition, if it starts raining oil and/or if New Orleans and the surrounding coastline residential and commercial property starts being spread by hurrican oil contaminated water, what do you think will happen to the value of this property and to the related residential/commercial loan portfolios of the banks? If sniffing and bathing in oil becomes a public health issue, how many people could FEMA decide to evacuate?

    I would appreciate your views in that regard.

    JB

  • Geoffrey P. Johnston

    My name is Geoffrey P. Johnston. I am a Canadian freelance journalist. I recently read Mr. Rubin's excellent book about the post-oil economy and globalization. I have read a number of such books–The End of Oil; The Long Emergency; and Power Down–and I must say that Mr. Rubin's treatise is the easiet to read, especially from a Canadian perspective. Please find below an article that I wrote about Africa and the post-oil economy. I reference Mr. Rubin's compelling book. Thanks. Geoffrey P. Johnston

    « BackG20 ignores looming energy and African trade crises
    Posted 8 hours ago
    Despite attempts by violent black-clad militants to disrupt the G20 summit at Toronto, the leaders of the top industrialized and emerging economies managed to make progress on global economic issues.

    Unfortunately, Prime Minister Stephen Harper and his guests failed to address a looming global energy crunch that will scuttle the G20's commitment “to work with Least Developed Countries to make them active participants in and beneficiaries of the global economic system.” And Africa will be hardest hit by the inevitable crisis.

    Integrating Africa into the global trading system is seen by some anti-poverty organizations and governments as an economic panacea for Africa.

    For example, One, an advocacy group co-founded by Bono, states that economic growth “driven by trade and investment is the critical engine that will end poverty in sub-Saharan Africa.” The group advocates the dismantling of tariffs that caused Africa's share of world trade to

    CMYK

    shrink from 6% in 1980 to 3.5% in 2008.

    The Harper government also supports, in theory, the elimination of trade barriers. Speaking at the African Innovation and Technology Conference in Ottawa earlier this year, International Trade Minister Peter Van Loan declared that freer trade leads to “prosperity, stability and a better quality of life.”

    Canada's commitment to opening up trade markets isn't just rhetoric. “Canada has strengthened its economic relationship with Africa,” said Van Loan, noting that imports from Africa “have more than doubled since 2000, and our exports have more than tripled.”

    Canada'slaissez fairetrade strategy for African development requires access to a relatively cheap, plentiful supply of oil. Unfortunately, the plan will soon become obsolete.

    The era of cheap oil is drawing to a close, effectively ending globalization, writes Jeff Rubin in his 2009 book,Why your world is about to get a whole lot smaller. “The global economy runs on oil,” explains the former chief economist at CIBC World Markets, “because the global economy is about moving things around the world.”

    He predicts that as the finite global supply of oil diminishes and world demand inevitably increases, high energy costs will become the new reality, making it “harder and harder to make money, whether you do that by driving a cab or by selling pineapples.”

    When free traders and activists recommend opening developed markets to African trade, they are really talking about importing more sub-Saharan agricultural products.

    Rubin points out that the world market for fruits and vegetables has already “grown dramatically during the cheap-oil era, doubling in size during the 1980s and by another 30% in the 1990s.” For example, Ontario's foreign food imports rose from 25% in 1988 to 40% in 2009. But this trend will not be sustainable when the global energy crisis hits.

    Rising energy and transportation costs will eventually drive up the cost of agricultural imports, forcing Canadian consumers to turn to local farmers to supply most of their food.

    The Organization for Economic Co-operation and Development estimates that in 2007 developed nations allocated $223.5 billion US to farm subsidies, accounting for nearly a quarter of that year's total farm income in the developed world.

    Harper should do what he can to facilitate Africa's development. But he must not do so at the expense of Canadian farmers, who will be vital to Canada's survival in the coming crisis. This means that the prime minister must resist One's recommendation to end federal subsidies for Canadian farmers.

    Instead of attempting to integrate Africa into a global trading system that isn't sustainable in the long run, the G20 should help Africa develop viable continental and regional trading patterns. Even One acknowledges that “increasing trade and investment among sub-Saharan African countries through economic integration could bring real benefits in employment and incomes.”

    Yet Africa's poor roads, bridges and electrical grids are major barriers to intra-regional trade. When the G20 meets again in South Korea later this year, Prime Minister Harper should propose an initiative to address the continent's infrastructure deficit.

    Canada could also boost sustainable trade patterns by providing fledgling African trading blocs with Canadian expertise in forging bilateral and multilateral trade agreements.

    Meanwhile, Kingstonians can begin to make the transition to the post-oil economy this summer by heading down to Market Square to buy fresh produce at the farmers' market.

    Geoffrey P. Johnston is a local writer.

    Copyright © 2010 The Whig Standard

  • Highland

    My name is Geoffrey P. Johnston. I am a Canadian freelance journalist. I recently read Mr. Rubin's excellent book about the post-oil economy and globalization. I have read a number of such books–The End of Oil; The Long Emergency; and Power Down–and I must say that Mr. Rubin's treatise is the easiet to read, especially from a Canadian perspective. Please find below an article that I wrote about Africa and the post-oil economy. I reference Mr. Rubin's compelling book. Thanks. Geoffrey P. Johnston

    « BackG20 ignores looming energy and African trade crises
    Posted 8 hours ago
    Despite attempts by violent black-clad militants to disrupt the G20 summit at Toronto, the leaders of the top industrialized and emerging economies managed to make progress on global economic issues.

    Unfortunately, Prime Minister Stephen Harper and his guests failed to address a looming global energy crunch that will scuttle the G20's commitment “to work with Least Developed Countries to make them active participants in and beneficiaries of the global economic system.” And Africa will be hardest hit by the inevitable crisis.

    Integrating Africa into the global trading system is seen by some anti-poverty organizations and governments as an economic panacea for Africa.

    For example, One, an advocacy group co-founded by Bono, states that economic growth “driven by trade and investment is the critical engine that will end poverty in sub-Saharan Africa.” The group advocates the dismantling of tariffs that caused Africa's share of world trade to

    CMYK

    shrink from 6% in 1980 to 3.5% in 2008.

    The Harper government also supports, in theory, the elimination of trade barriers. Speaking at the African Innovation and Technology Conference in Ottawa earlier this year, International Trade Minister Peter Van Loan declared that freer trade leads to “prosperity, stability and a better quality of life.”

    Canada's commitment to opening up trade markets isn't just rhetoric. “Canada has strengthened its economic relationship with Africa,” said Van Loan, noting that imports from Africa “have more than doubled since 2000, and our exports have more than tripled.”

    Canada'slaissez fairetrade strategy for African development requires access to a relatively cheap, plentiful supply of oil. Unfortunately, the plan will soon become obsolete.

    The era of cheap oil is drawing to a close, effectively ending globalization, writes Jeff Rubin in his 2009 book,Why your world is about to get a whole lot smaller. “The global economy runs on oil,” explains the former chief economist at CIBC World Markets, “because the global economy is about moving things around the world.”

    He predicts that as the finite global supply of oil diminishes and world demand inevitably increases, high energy costs will become the new reality, making it “harder and harder to make money, whether you do that by driving a cab or by selling pineapples.”

    When free traders and activists recommend opening developed markets to African trade, they are really talking about importing more sub-Saharan agricultural products.

    Rubin points out that the world market for fruits and vegetables has already “grown dramatically during the cheap-oil era, doubling in size during the 1980s and by another 30% in the 1990s.” For example, Ontario's foreign food imports rose from 25% in 1988 to 40% in 2009. But this trend will not be sustainable when the global energy crisis hits.

    Rising energy and transportation costs will eventually drive up the cost of agricultural imports, forcing Canadian consumers to turn to local farmers to supply most of their food.

    The Organization for Economic Co-operation and Development estimates that in 2007 developed nations allocated $223.5 billion US to farm subsidies, accounting for nearly a quarter of that year's total farm income in the developed world.

    Harper should do what he can to facilitate Africa's development. But he must not do so at the expense of Canadian farmers, who will be vital to Canada's survival in the coming crisis. This means that the prime minister must resist One's recommendation to end federal subsidies for Canadian farmers.

    Instead of attempting to integrate Africa into a global trading system that isn't sustainable in the long run, the G20 should help Africa develop viable continental and regional trading patterns. Even One acknowledges that “increasing trade and investment among sub-Saharan African countries through economic integration could bring real benefits in employment and incomes.”

    Yet Africa's poor roads, bridges and electrical grids are major barriers to intra-regional trade. When the G20 meets again in South Korea later this year, Prime Minister Harper should propose an initiative to address the continent's infrastructure deficit.

    Canada could also boost sustainable trade patterns by providing fledgling African trading blocs with Canadian expertise in forging bilateral and multilateral trade agreements.

    Meanwhile, Kingstonians can begin to make the transition to the post-oil economy this summer by heading down to Market Square to buy fresh produce at the farmers' market.

    Geoffrey P. Johnston is a local writer.

    Copyright © 2010 The Whig Standard

  • http://twitter.com/dearOil foreign policy

    As an European advocate of oil/gas price unbundling in order to provoke fair Atlantic competition, please read my address to John Hofmeister (Why WE Hate The Oil Companies)

    The Nation’s demand & Global need

    - ATLANTIC UNBUNDLING – confrontation or intervention?

    Dear John / Mr. Hofmeister,

    I think you’re doing a great job in opening up people’s clean energy awareness by opposing the pollution politics to prepare them for the big mind-shift: the American scream echoes in Europe!

    The big global question seems to be wether the costs of cheap & dirty are worth the price.

    Your idea and proposition is that God’s earth needs a fundamental grassroot ‘intervention’ in the global oil economy because world leaders for the last fourty years didn’t understand the future’s human needs and sophisticated but abused US technology advantage which resulted in worldwide industrial dominance, non-transparent public-private relationships and information disorder related to the consolidation of the global energy agenda in 1963 when oil and gas prices were linked:

    the New Oil Order of the lock-in society, international consumer community and foreknowledge-economy of excess, arrogance and abundance that facilitated the United States of America in imposing coverted insider trading on the remainder of the world. Hence the global disorientation.

    Your answer to my question about the world’s biggest public-private partnership, the Dutch Gasunie (Exxon-Shell-Gov.nl) holding the global energy agenda hostage, boiled down to diplomacy and energy-politics not being part of corporate concern and contract.

    Now, for the broader caucus of knowledge and technology management related to the need to restore global imbalances ‘back to normal’, why not instate the global Big Crunch Preventor by direct implementation of transatlantic fair, sound and real competition based on sustainable energy innovation by means of new fundamentals decoupling the toxic petrodollar from the suffering euro in order to force a sane natural gas market in Eurasia?

    Ending “cheap & dirty” for the sake of stopping gross human incompetence caused by public-private miscommunication – parliamentary deficit & democratic deceit – would undoubtly be welcomed by the global citizenry backing clean energy and affordable life for all of us.

    Don’t you think voters have to know and understand why and how the oil companies have stamied sustainable energy innovation?

    Sincerely yours,
    Stephan Tychon
    http://pollutico.com

    CHECK IMBALANCES: http://x.vu/GreatCoalDebate

  • http://twitter.com/dearOil foreign policy

    Eco,
    The American dream is extended by US lawyers, international bankers and global bonus-buffer-budget crime. Reversing globalization back to localization involves the prescience of abused technology-advantage back in the past when the globalization trend was seized and consolidated: 1963 the biggest public-private partnership in the world: Exxon-Shell-Gov.nl that linked the petrodollar to natural gas prices worldwide.

    Stephan Tychon
    http://petroleum-s.com

  • Walt

    If there is any energy need and/or if there is any America.

    Wow, from the reports we are getting about the leak being too big – extremely high pressure, multiple holes, etc., and that they will not be able to stop this, eventually destroying much, or most of the Gulf and Gulf states, and of a current total media blackout, under threats of arrest – this is really out of hand – reflecting how out of touch and downright out of control this government is. Add to this the extreme & massive manipulation and theft in the markets, etc., and it is becoming really clear that we are under attack and the enemy is in Washington, D.C., and are in control of our government.

  • Jose Duarte

    I read your book. It is frightnening to say the least. If truck transportation breaks down how will the urban population will survive? How do wee feed a 1.000.000 people city? and a 10.000.000 one? Relocating people to the country side? What kind of social convulsions will take place? I am a shipping professional and the prices of Marine GasOil in 2008 are still in my mind. As I said, frightening. Duarte, Portugal

  • Frank Avila

    I just came across this Solar Fuel article. What do you think?
    http://www.technologyreview.com/energy/25077/