Profit from the Peak: The End of Oil and the Greatest Investment Event of the Century (Angel Series)

307 Pages·2008·2.35 MB·English

by  Brian Hicks

PROFIT FROM
THE PEAK
The End of Oil and the
Greatest Investment
Event of the Century
B R I A N H I C K S
C H R I S N E L D E R
John Wiley & Sons, Inc.
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PROFIT FROM
THE PEAK
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PROFIT FROM
THE PEAK
The End of Oil and the
Greatest Investment
Event of the Century
B R I A N H I C K S
C H R I S N E L D E R
John Wiley & Sons, Inc.
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Copyright © 2008 by Angel Publishing, LLC. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data:
Hicks, Brian, 1968–
Profi t from the peak: the end of oil and the greatest investment event of the century /
by Brian Hicks and Chris Nelder.
p. cm.
Includes index.
ISBN 978-0-470-12736-0 (cloth)
1. Petroleum industry and trade. 2. Energy industries. 3. Commodity futures.
I. Nelder, Chris, 1964– II. Title.
HD9560.5.H47 2008
333.8'23—dc22
2007047638
Printed in the United States of America.
10 9 8 7 6 5 4 3 2 1
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CONTENTS
List of Figures ix
List of Tables xii
Acknowledgments xiii
Introduction xv
PART I. THE CRISIS IN A BARREL
CHAPTER 1: DECEMBER 2005: THE MONTH THE DEVIL
WEPT HIS TRILLIONTH TEAR 3
CHAPTER 2: WHAT IS PEAK OIL? 7
What Is Oil? 7
Hubbert’s Peak 10
Types of Oil 12
Refi ning 15
Oil Prices 16
Reserves Revisions 16
Importance of Giant Oil Fields 22
When Is the Peak? 25
Exports 31
Reserve Replacement and Deepwater Drilling 35
Differing Projections 36
Drilling Like Never Before 42
Infrastructure Issues 44
The Bottom Line on Peak Oil 46
The Hard Truth 51
v
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vi
Contents
CHAPTER 3: WANTED: FIVE NEW SAUDI ARABIAS 53
Global Demand and Population 54
China and India 58
Making up for Depletion 62
U.S. Dependence 63
Investment Opportunities 67
CHAPTER 4: $480 A BARREL: THE TRUE VALUE OF OIL 71
Cheaper than Water 71
Draining the National Coffers 72
The True Cost of Oil 73
Government Subsidies 74
Environmental Costs 75
Climate Change Cost 76
Natural Capital Costs 76
CHAPTER 5: THE PENTAGON PREPARES FOR PEAK OIL 79
Reduce Dependence on Oil 80
Reduce CO Emissions 85
2
Staunch the Bleeding 88
Invest Heavily in Renewables 89
Policy Recommendations 90
Solar for China? 91
PART II. MAKING MONEY FROM
THE FOSSIL FUELS THAT ARE LEFT
CHAPTER 6: TWILIGHT FOR FOSSIL FUELS 95
Natural Gas 96
Coal 111
Diminishing Returns and Receding Horizons 119
Energy Return on Investment 122
Global Warming 123
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vii
Contents
CHAPTER 7: TAR SANDS: THE OIL JUNKIE’S LAST FIX 125
Tar Sands 125
Oil Shale 131
PART III. ENERGY AFTER OIL
CHAPTER 8: THE RENEWABLE REVOLUTION 137
Oil and Gas Executives Want Renewables 139
World Bank Financing 140
Biofuels 141
CHAPTER 9: ENDLESS ENERGY: HERE COMES THE SUN 153
A Short History of Solar Technologies 154
The Sky’s the Limit 155
Photovoltaics Takes Center Stage 156
Grassroots Momentum 160
Investment Opportunities 161
CHAPTER 10: PRESSURE COOKER: TAPPING
THE EARTH’S HEAT 165
What Is Geothermal Power? 166
Benefi ts of Geothermal Power 169
Explosive Growth 169
Investment Opportunities 171
CHAPTER 11: NUCLEAR’S SECOND ACT 175
Nuclear Potential 176
China and Nuclear Power 177
Limits to Nuclear Power 178
Investment Opportunities 183
CHAPTER 12: WHAT’S NEEDED: A MANHATTAN
PROJECT FOR ENERGY 187
The Importance of Timely Response 188
Apollo Alliance 192
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