Thursday, August 2, 2007


CATCH News – August 2, 2007
Peak oil response still in limbo
A staff report on peak oil that was supposed to take three weeks has still not appeared 15 months later. In the meantime, industry and business think tanks are warning of shortages and $100-a-barrel oil prices by the end of next year.
City councillors received a report on peak oil from consultant Richard Gilbert in April 2006 which argued that gasoline prices are likely to reach $4 a litre in a little more than a decade and the city should redo all its plans to put energy first. As a first step, he recommended a follow-up to his initial study.
“First of all you need to do a much better report than I’ve done,” he told councillors, explaining that he was only asked to provide a brief overview of the issue and its implications and a more detailed report “can be done in four months or so.”
In response, councillors unanimously instructed staff to “consider a Terms of Reference and cost analysis for a follow-up report” by mid-May 2006. But the report was not presented and even the instruction to produce it disappeared in the bureaucracy – a fact noted in a CATCH review last November.
An Environment Hamilton climate change report in February recommended proceeding with the follow-up peak oil report, and councillor Brian McHattie took the opportunity to again request the staff report – while carefully avoiding assigning blame for its disappearance.
“There was a request for a draft terms of reference to come back to committee on the phase two report,” he recalled from the April 2006 meeting. “And from my understanding, between the committee of the whole discussion and it going to council, there was some changes in the recommendations, and …the draft terms of reference was lost in some way in the wording.”
McHattie’s motion to again request the staff report was approved unanimously, but has not yet generated anything. As of the most recent meeting of the committee of the whole in early July, it was the oldest item on the outstanding business list, but no deadline for delivery is provided.
Another part of the April 2006 council resolution asked for a staff report on strategies to reduce energy use. It was referred to the public works committee for a report in June 2006. That deadline was then delayed a full year to June of this year, when it was again put off and is now due on September 17.
In the meantime, oil prices have climbed to record levels and discussion about the timing of peak oil and its implications have moved to the mainstream media and business community.
A CIBC World Markets Inc report released on July 18 predicts that $100-a-barrel oil will arrive by the fourth quarter of 2008 as a result of declining exports from OPEC and Mexico. The latter’s production has fallen 25 percent since 2005 and appears likely to be down twice that amount by the end of next year.
The analysis followed a report from the International Energy Agency warning of a looking oil supply crisis..
"Oil looks extremely tight and the world is facing a supply crunch over the next five years," said the IEA’s latest report released a week before the CIBC report, leading the editors of the Financial Times to conclude that “oil prices approaching $100/barrel, until recently dismissed as the industry's Utopia, now look like a dead certainty over the next few years.”
Hamilton’s council commissioned the Gilbert study on peak oil in June 2005 at the request of councillors. The report was delivered to staff in October of that year but its release was delayed for more than six months, despite repeated requests from then Flamborough councillor Dave Braden who clashed with senior staff in January 2006. Braden was told at that time that the report had been returned to Gilbert for changes, but found out differently when he called Gilbert directly.
When the report was presented to council in April of last year, Hamilton was only the second municipality in Canada to have requested an analysis of the implications of peak oil. Similar steps have now been taken by a number of US cities including San Francisco, Portland, Denver, and the Southern California Association of Governments.

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