The Peak Oil Crisis: Virginia’s Energy Plan

So far, gasoline prices, which are the major concern to most, have not risen very much. This is attributed to the drop in demand which takes place after Labor Day and the transition to cheaper-to-produce winter gasoline which goes on the market in September. This situation is unlikely to last much longer. Many knowledgeable observers are beginning to talk of $90 or even $95 oil this winter which will bring gasoline prices to new highs.

We built up our stockpiles well above average earlier in the year, so that we are still 40 or 50 million barrels away from being in trouble and we always have the strategic reserve to fall back on. However, if imports continue to run 3-5 million barrels per week lower than last year, we clearly will be in trouble a few months from now.
While awaiting further developments I would like to make some observations on “The Virginia Energy Plan” published last week. The 180-page plan, which was mandated by the General Assembly last year, reflects the goals of all those with an interest in the future of Virginia’s energy: producers, consumers, environmentalists and many others. There is something for everybody which is why the most of those concerned could find something to praise. Even the Sierra Club called it a “very well balanced report,” but then went on to release their own report which calls for cutting carbon dioxide emission by 80 percent before 2050.

It would be nice to say the legislation and energy plan were written to prepare the state for dealing with the consequences of declining oil supplies, but this is only partially true. The original legislation was drafted to encourage drilling for oil in Virginia’s coastal waters, but then in true legislative fashion, was decorated with so many amendments and compromises that nearly everyone found something to like.

Since the notion that peaking world oil production will soon cause major problems has not yet firmly taken hold in the minds of most Virginians, the plan is not cast around mitigating the consequences of peak oil. From the peak oil perspective, the major flaw is the timing which speaks of goals in decades when the real problems may be months away.

There is nothing wrong with reducing the rate of growth of energy use by 40 percent over the next 10 years, unless one has an appreciation of just how bad the peaking of world oil production and more importantly exports is likely to be. If things turn really sour, it is likely that Virginia will be dealing with absolute reductions in available energy, particularly liquid fuels,ten years from now and not just slowing the rate of growth.

Once you get by the lack of urgency in Virginia’s plan, there is much to praise. The emphasis on conservation and consumer education is exactly what will be needed to cope with the consequences of peak oil.

Falls Church News Press