• Oil Rates – you ain’t seen nothing yet Oil Rates – you ain’t seen nothing yet By Bill Cowern As someone who follows energy issues closely, I read with great interest the recent letters on KIUC rates. It is
• Oil Rates – you ain’t seen nothing yet
Oil Rates – you ain’t seen nothing yet
By Bill Cowern
As someone who follows energy issues closely, I read with great interest the recent letters on KIUC rates. It is troubling to watch something, as necessary to our way of life, as electricity, rise in cost, but since we are so closely tied to oil prices it is inevitable that they will continue to rise. The base rate for electricity already includes a lot of the fuel cost, so an increase in the cost of oil will have a much greater impact on the fuel surcharge percentage than the actual increase in oil cost. The utility is not allowed, by law, to make even a penny on the fuel surcharge. There is no rip-off here.
As to Walter Lewis’ eloquent discussion of rate changes, I can not even begin to address what I know so little about.
But I do know that our reliance on oil is going to bite us in the okole soon. The problem Is known as peak oil. It is that point in time when world oil production can no longer increase, but rather peaks, or plateaus, then beginning to fall. Supply will no longer meet demand. This will cause rapid and massive increases in fuel costs, and severe impacts on the world’s economy. It is a dire forecast and I do not expect you to believe a humble tree farmer on this issue. But people like John Bookout, the previous CEO of Shell Oil, Colin Campbell, previous president of Petroconsultants, (they maintain the largest geological oil and gas database in the world). Matt Simmons, CEO of the world’s largest energy investment banking firm, Jean Laherere, previous CEO of Total Fina, and Ali Samsam. Baktiari, present head of Planning for the National Iranian Oil Co., and others, all believe we will hit this peak within the next five years. Most believe by 2007-2008. It will make the present increases in KIUC rates look meager. I have been writing about this problem for about 5 years but denial is apparently easier than acceptance.
A few facts; 60% of the roughly 8000 oil fields in the world are in decline. This includes all of the North Sea, all of the US., Canada, Mexico, Australia, most of South and Central America, all of Europe, many OPEC countries, including Venezuela and Indonesia, where we get most of our oil. Indonesia became a net importer of fuel this year. Natural gas production in the US. and Canada has declined for the last three years. Since 1980 the world has found about 1 barrel of oil for every 4 we use. The world presently uses 3.4 billion gallons of oil a day. That’s right, a day.
We need to heed the warnings of knowledgeable people with their hands on the data. There are things we can do to limit the obvious pain of this upcoming, inevitable event, and at minimum, a serious discussion should begin.
I believe that Kauai has a much better chance of coping with this sort of a problem than many other areas of the world, because we are rural, we have wind, water, solar, and biomass potential and because we have a Co-op, but not if we wait until it hits us in the face, or anywhere else.
Bill Cowern is a resident of Lawa‘i
