The world is not running out of oil - but Europe is

The Old Lady Vanishes

Petroleum geologist Wallace Pratt said, "Oil is found in the minds of men". He was referring to the theory of making discoveries. In the case of Eurocrats, however, it’s more of a practical observation

By Peter Glover

If Europe thought it had a crisis on its hands in the eurozone, it’s nothing compared to the crisis a lack of oil would inflict. Thanks to the EU’s disastrous energy policies, while the world is proving to be awash with black gold in one form or another, Europe is fast losing the security of its oil supply.

And, just for good measure, a UK House of Lords report recently published concludes that the EU will need a trillion euros of new investment if it is to stave off an energy crisis – investment its “muddled” policies are currently failing to attract.

Contrary to popular belief, peak oil alarmists and Greenpeace propaganda, the world is still largely powered by oil. It will be for some time to come. And not just for transport. An endless number of consumer goods depend on a steady supply of petroleum products for their manufacture.

As Marin Katusa, chief energy investment strategist for Casey Research points out, “A country without oil simply cannot continue to expand or even be competitive on the world stage.” Katusa explains that most of Europe’s oil comes from the North Sea region – a source where production has dropped to less than half of what it was in 2002.

Much of the rest of it comes from countries such as Libya, Saudi Arabia and Nigeria, all countries threatened by political instability and social unrest. Europe could, of course, push development of its own potential oil resources. Or at least it could if the ludicrously inept EU Energy Road Map wasn’t studded with anti-fossil fuel pot holes and renewable energy cul-de sacs that are deterring investors.

Let me give you just a taste of the type of non-joined-up euro-think that drives EU energy policies.

We all know that the US shale gas revolution has cut US gas prices in half, rejuvenating the US manufacturing industry. It is even threatening to prove to be an economy-turner. But what many do not understand is that where there is gas there is often oil.

In the US, land and mineral rights tend to promote exploration. In Europe, however, mineral rights belong to the government and exploration is controlled by the bureaucrats. So while fracking in the US free market has released a bonanza of shale gas it has also led to enormous oil shale production. But that’s not all. The use of coal has fallen significantly facilitating a steep drop in carbon dioxide emissions (if you think that’s important).

Meanwhile, Europe’s policy of favouring renewable energy through massive subsidies that have pushed up the costs of energy-intensive industries making them uncompetitive, is keeping domestic prices abnormally high. One unforeseen result has been to boost ‘dirty’ King Coal back to number one in the fuelling charts, offering Europe no chance of hitting its key carbon cutting targets.

Here’s a question: Which of the renewable energies has Europe favoured most? Wind? Solar? Not even close. It’s that old pre-industrial favourite: wood. Believe it or not, wood currently accounts for almost 50 percent of Europe’s renewable-energy consumption. In some eastern European countries, including Poland, it’s up to 80 percent. That’s because the EU classed wood as a ‘renewable’ energy resource on the basis that when you cut one tree down you can plant another. (Nobody seems to have considered that it can take a tree up to a hundred years to grow – and won’t what’s left of mankind be all living on a small island off Greenland by then?)