The magazine on peak oil and the Transition movement
Jeff Rubin spent twenty years as Chief Economist and Managing Director of CIBC World Markets. He's a sought after speaker and the author of Why Your World Is About To Get A Whole Lot Smaller: Oil and the End of Globalization. His website is Jeff Rubin's Smaller World.
Move over OPEC, North America is about to become a net exporter of oil. At least that’s the supposed good news from the International Energy Agency’s latest outlook. According to the IEA, the drilling boom for shale oil is putting US production on track to pass Saudi Arabia. North of the border, output from Alberta’s oil sands is expected to notch a similarly grand expansion. Notions of energy independence, however far fetched they may seem today, play well to the IEA’s target … [Read more...]
In chemistry you quickly discover that oil and water don’t mix. The same is true in the energy industry. It’s unfortunate, because the new fuel sources that the International Energy Agency claims will allow North America to reach energy independence require tremendous amounts of water. Whether it’s from shale plays or the oil sands, millions of gallons of water are needed to pull that energy out of the ground. Alberta’s oil sands mines require more than three barrels of water to … [Read more...]
It works for oil and natural gas, so why not frack for uranium too? After all, America relies on foreign uranium just like it depends on foreign oil. In the U.S. these days, it seems like you can sell almost anything if you spin it as part of the pursuit of energy independence. Enter Uranium Energy Corp. A junior mining company with Canadian roots, UEC is developing the newest uranium mine in the U.S. And it’s counting on fracking to do it. Texans, in general, are no strangers to … [Read more...]
If we know anything about what makes our economy tick we know this: Feed it cheap oil and it runs like a charm. But keep it rationed to expensive fuel, and growth stops dead. Every major global recession in the past four decades has oil’s fingerprints all over it. For all of our efforts to wean ourselves off the fuel, oil remains the world economy’s most important source of energy (and, as a transit fuel, almost its only source of energy). In the past, oil prices spiked to … [Read more...]
No matter how hard the Fed pushes, the US economy isn’t going to respond to yet another round of quantitative easing. What ails the US economy is not the cost of credit. From car loans to mortgages, borrowing money has never been cheaper. The Fed’s aim to stir the economy by printing more money is off the mark. Certainly boosting the money supply will have an affect, but it won’t be on domestic spending, as hoped, but on exports. Ben Bernanke’s explicit promise to keep interest rates … [Read more...]
It seems everywhere you look these days economies are gearing down to much slower speeds. Indeed, some economies are already at a standstill (or even moving in reverse) and it’s likely more will soon follow. Whether it’s North America and Europe or even China and India, the story is much the same — the world’s largest economies are running out of gas. Despite the best efforts of central banks and finance ministries, even unprecedented fiscal and monetary stimulus aren’t enough to … [Read more...]
Four years ago, when I was still chief economist at CIBC World Markets, I forecast that global economic growth was on pace to send oil prices to $200 a barrel by 2012. In short, the argument was based on a supply-driven analysis that weighed the sources of future oil supply against the prices that would be needed to make the extraction and processing of that oil economically viable. Since that call (which clearly hasn’t come to pass) received some attention at the time, it feels fitting to … [Read more...]
European voters are rejecting further fiscal restraint, showing the door to former austerity-imposing politicians in Greece and France. In a similar spirit, European Central Bank President Mario Draghi is now calling for a “growth pact” to replace the “fiscal pact” demanded by Angela Merkel’s government in Germany. What Europe’s voters and its central bank are coming to recognize is that unremitting fiscal austerity measures are the wrong prescription for what ails the European … [Read more...]
Can we still expect to see sustained economic recoveries when oil, the world’s principal source of energy, is trading in triple digit range? As I argued several years ago in my book, Why Your World Is About To Get A Whole Lot Smaller, triple digit oil prices will redefine our notion of an economic recovery because as soon as the global economy picks up, oil prices will quickly soar to levels that challenge growth. Last year was a case in point. In the second full year of recovery from … [Read more...]
Facing growing political and environmental opposition in the US to the proposed Keystone XL pipeline (now indefinitely delayed, a victory for pipeline opponents -- ed.), Canada’s landlocked options for exporting its oil have never appeared more costly. Not only has deadheaded oil in Cushing, Oklahoma, the present terminus of the pipeline, put a crimp on expansion plans in the oil sands, but the ballooning price spread between West Texas Intermediate (WTI) and world oil prices has cost … [Read more...]
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