This column from Tom Whipple was so good, I decided to repost the whole thing. For those of you who don’t know Tom’s work, he regularly writes a column on peak oil for The Falls Church News-Press of Virgina and is one of the most astute observers of peak oil data around. He’s one of the best and I have cribbed liberally from his work. Add ’em to your Google Reader!

–C
The Peak Oil Crisis: Approaching The Cliff

By Tom Whipple

The Falls Church News-Press

Thursday, 21 June 2007

Last weekend across southern South Dakota the pumps
went dry. Gas terminals from Sioux Falls to Yankton to Sioux City were
empty. “There is simply not enough fuel coming down the pipeline into the
delivery system” said a BP station owner. Eventually the tankers were sent
to Nebraska to find gas. A minor glitch in the distribution? Possibly, but
more likely a harbinger of more serious problems to come.

Meanwhile, I would like to tell you that Congress,
which has been debating energy bills for the last two weeks, is getting
ready to pass legislation that will make our lives easier during the
troubled years ahead. Sadly, I cannot. From their public pronouncements
and posturing, it is unlikely more than a dozen members of Congress have
the slightest idea of what 2007 energy legislation should be trying to
accomplish in an urgent manner.

Many of the just-barely-in-the-majority Democrats,
especially in the Senate, are on the right track, with proposals to
improve average gasoline consumption, and to increase the use of renewable
energy. Scattered here and there are conservation measures and R&D
money for more efficient something or others, but from the perspective of
imminent oil depletion, the proposals are too little, too late. Setting
efficiency goals for 10 or 15 years from now is absurd when the problems
to solve may be upon us in 15 or 20 months, or, if the real alarmists are
right, in 15 or 20 weeks.

However inadequate the Democrats’ proposals may be,
they pale in comparison to the absurdity of the opposition to energy
legislation forming on Capitol Hill. Detroit, in conspiracy with the coal
and electric industries, is mounting a full court press to see that little
gets through this Congress to upset the status quo – mild efficiency
standards, no greenhouse gas regulation, no renewable energy mandates.
From the opposition’s point of view, if Congress wants to do anything,
then it might be OK for them to bankroll the R&D so we can convert
good old American coal into our gasoline; don’t even think about taxing
energy, but a few more subsidies might be nice.

With crucial Senate votes scheduled for later this
week, it is still too early to judge what the final legislation will look
like, but it is starting to look as if we are going to arrive at the
precipice of oil depletion without Congress having done much of anything
to mitigate the situation. The American automobile industry is clearly on
its way to committing suicide; the coal industry does not seem to realize
its days are numbered; and the electric industry seems to have no notion
that, within a lifetime, fossil fuels and perhaps even some forms of
nuclear energy are going to have to be replaced.

As a civilization, we are all to blame. Most Americans
are showing little inclination to cut back on driving. In study after
study we tell interviewers we are willing to spend our last nickel,
mortgage the farm, and deprive our grandchildren before we will give up
driving. We are all heading towards the cliff together.

Not much happened in the last week to tell us just how
close we are to the cliff. There is a general strike going on in Nigeria
that so far does not seem to be affecting oil production. Nigerian strikes
are usually settled quickly, but there is a new president in charge so
there could be surprises in store. In the Niger Delta, the insurgency
bubbles along, despite the nominal ceasefire, with still more oil being
shut-in by the insurgents during the past week.

From the perspective of oil production, Iraq continues
to hold its own. OPEC is still refusing to consider production increases
and the Chinese imports of crude oil continue to increase.

This week’s U.S. oil status report was a strange one.
U.S. refinery utilization plunged to what should be an abysmally low 87.6
percent, but at the same time the refineries managed to produce the same
amount of gasoline as the week before. Unless there is something wrong
with the numbers, this confirms that improvements made to our refineries
in recent years are now allowing them to squeeze considerably more
gasoline out of each barrel of crude — a definite plus. Imports increased
a bit, resulting in U.S. gasoline stockpiles growing by 1.8 million
barrels last week. There are still major shortages along the East Coast
and the summer driving season is almost here. There seem to be some
unusually large anomalies in this week’s report, however, so there may be
revisions ahead.

In general, the gasoline stockpiles situation now can
be categorized as serious rather than dire. We seem to be getting the
gasoline we need without our refineries working too well and so far we
seem to be able to find enough gasoline to import. From here through Labor
Day it depends on how much we all drive and of course the hurricanes. None
are yet in sight.