Quick Shots - 04/Jan/2016

Belatedly, Happy New Year To You All!

Here's to the new year, may it be better than the last one.
I'm doing okay, I hope you are all okay or much better than okay. :)

Iran, Saudi Arabia, OPEC, Oil

This business of Saudi Arabia beheading people is the quiet problem nobody's willing to talk about. Thinking back to Gulf War I, the western media has always played reports on Saudi Arabia with a favourable view, by and large because they were most supportive of Bush Snr.'s Gulf War. They cemented that media handle by being all-in behind GWB's Iraq War, and beating up on Saddam. With Saddam gone, and the West largely withdrawing from the colonial project, Saudi Arabia is now at loggerheads with Iran because, well, religion and race are different.

And so it's now a Sunni versus Shi'ite spat with Saudi Arabia executing a Shi'ite cleric and of course Iran being the land of religious fundamentalist rule, they're not taking this lightly. Brent crude has gone up 6.5%.

CMC Markets chief market analyst Ric Spooner said the price rise was directly linked to the political unrest.

"News that Saudi Arabia has cut diplomatic relations with Iran has led to short covering in early trading on the oil market as traders build risk premium into prices," said Mr Spooner. 

"While there is no immediate threat to production implied by this situation, political unrest that directly impacts major OPEC producers is unsettling.
"Oil markets will be concerned that this could be an incremental step in a deteriorating political situation that might ultimately threaten world oil supply."

I guess it's a case of it-never-rains-it-pours. OPEC is as good as dead if nobody is sticking to the cartel's own supply plans. Saudi Arabia is trying to max out on market share through over-production which is surprising because if the peak oil advocates are to be believed, they're bringing about their own doom much sooner. One would think temperance would dictate they cut supplies to maintain prices.

Of course, Saudi Arabia being the strange place that it is, it is also fighting a waring Yemen and lots of the ruling elite are tacitly handing out money to ISIL (who are ostensibly Sunni crazies) ; ISIL is flooding the market with their cheap oil which they pump through Turkey, and Russia's trying to earn as much foreign currency as well as it struggles under sanctions so they're not exactly going to cut their oil production either. If peak oil is even remotely a true-ish concept, the rate at which we're pumping out crude oil beggars belief.

Turnbull's Frontbencher Woes

It's amazing how fragile the balance of agreements that places MPs as ministers on the frontbench. It might not even be their own good talent or character at all - it might just be that they're the right factional member with the right amount of seniority. It's hard to imagine why Mal Brough had to be brought back to Parliament after 2007's election wiped him out. The cloak and dagger conniptions involving Peter Slipper and his underling revel him to be a man of not-so-great character, but of course with the Abbott-Disposal and the rise of Malcolm Turnbull, he had to be a frontbencher.

Jamie Briggs is weirder. I've never even heard of this 37 year old idiot until he misbehaved and got himself into a world trouble. For the life of me I can't figure what exactly this man has done to be so deserving to be a frontbencher, but there he was until he fucked up.

Today, the news is turning into a discussion about Peter Dutton and his abusive text sent to a journalist. These people are proving to be far less professional than the local community theatre group.

I don't exactly have a lot of faith in the current crop of ALP frontbenchers after watching that Sarah Ferguson doco that dissected them, but this business shows just how lacking the Liberal Party is when it comes to proper, professional talent. Career politicians are going to ruin this country.

If It's So Good, Why's Everybody So Keen To Leave?

it's a genuine question. The Middle Flower Kingdom likes to beat its chest about all kinds things but somehow everybody seems to want to leave. They want to send their money overseas and get out. So despite being the world's second largest economy, they have to exert capital controls like Malaysia in the 1990s during the Asian Financial Crisis.

The latest move comes just three months after the People's Bank of China (PBOC) ordered banks to scrutinise clients' foreign exchange transactions to prevent illicit cross-border currency arbitrage between the offshore and onshore yuan. 

On Wednesday, the country's foreign exchange regulator also said it would improve its reserve position and contingency plans to curb risks from abnormal cross-border capital flows. 

"The main purpose is to crack down on excessive currency speculation and arbitrage, which may hurt the economy," said a senior economist at a think-tank linked to China's Cabinet. 

"They are worried about falling FX reserves. The yuan faces obvious depreciation pressure as the Fed (U.S. Federal Reserve) may continue to raise interest rates, so policymakers are concerned and intend to take effective measures to respond."
A source at one of the affected banks said China's central bank asked them to disclose the names of their foreign exchange clients buying spot and instructed any state-owned enterprises among them to stop trading. 

"The PBOC is robbing us. They're not being reasonable; even if we comply with everything, we provide all the documents, our spot volume is too large," the person said.

That's a great way to start the year. China's deep in the process of dealing with the end of its own financial bubble. It's not going to pull off any kind of soft landing. 

Oil Stories

Which Peak Are We Climbing?

Around 2008, the big story was peak oil. The production of crude was going to peak, and that spelt a contracted future for energy for our civilization. since then, the world has gotten on to this business of fracking and as ugly as it may seem, it has changed the equation of our future consumption of oil as energy.

Heck, I admit: I was one of the people taken in by the Peak Oil argument - but only because the person who first introduced me to the notion had very good facts and figures. Of course, if you take a static snapshot of where we are and extrapolate, you ca imagine all kinds of scenarios. Neither he nor I imagined that fracking would come along, back in 2005-2006.

In that light I want to draw attention to a couple of articles worth getting your head around. The first is this one which discusses oil and gas in the context of a 'commodities supercycle'.

After eight years, the Oil Drum is closing down, giving up the long struggle to alert us all to ‘‘peak oil’’ and the dangers of an energy crunch. The theme has gone out of fashion, eclipsed by shale and US fracking.

The demise of Britain’s leading website for oil dissidents has been seized on by critics as an admission that peak oil is a Malthusian myth. It comes amid a spate of reports from global banks announcing the death of the commodity supercycle, slain by creative technology.

Yet if you stand back, it is hardly evident that the world is again enjoying an abundant supply of cheap energy, metals, or food. Commodity prices have held up remarkably well, given that we are in a global trade depression of sorts.

The eurozone is in the longest unbroken recession since the 1930s, with industrial production 13 per cent below the pre-Lehman peak. Growth in the US has averaged 1.1 per cent over the last three quarters as it grapples with the most drastic fiscal tightening since the Korean War.

Russia and Brazil have ground to a near halt. China’s growth is near zero on a GDP deflator basis. Oil imports were down 1.4 per cent in June from a year earlier. Imports of iron ore were down 9.1 per cent.

It all adds up to a prostrate global economy, yet Brent crude oil is still trading at $US106. There is no comparison with the collapse to $US11 in 1998. The CRB commodities index remains three times higher than a decade ago.

You might conclude that the supercycle is in rude good health given what has been thrown at it. A new Eos report by the American Geophysical Union, Peak Oil and Energy Independence: Myth and Reality, argues that global crude output has been stuck on a plateau near 75 million barrels per day (bpd) since 2005 despite enticing returns.

The way the article couches it, it seems the immediacy of peak oil is temporarily delayed, thanks to the development of fracking, which will stave off peak production of fossil fuels in general for a generation. It's pretty begrudging about the technological development aspect of what has led to the fracking business. The fact is, that a technological breakthrough came along and solved the problem of peak oil by changing the mode of our harvesting of fuel and energy. This is very much in line with Schumpeter's observations about a creative destruction of value, as well as why to date, the Malthusian crunch has not come about.

The other article is this one in the Economist which covers the possibility that our demand for oil may be peaking, so future demand for crude oil may be nothing like the extrapolation of the Malthusian alarmists.

The other great change is in automotive technology. Rapid advances in engine and vehicle design also threaten oil’s dominance. Foremost is the efficiency of the internal-combustion engine itself. Petrol and diesel engines are becoming ever more frugal. The materials used to make cars are getting lighter and stronger. The growing popularity of electric and hybrid cars, as well as vehicles powered by natural gas or hydrogen fuel cells, will also have an effect on demand for oil. Analysts at Citi, a bank, calculate that if the fuel-efficiency of cars and trucks improves by an average of 2.5% a year it will be enough to constrain oil demand; they predict that a peak of less than 92m b/d will come in the next few years. Ricardo, a big automotive engineer, has come to a similar conclusion.

Not surprisingly, the oil “supermajors” and the IEA disagree. They point out that most of the emerging world has a long way to go before it owns as many cars, or drives as many miles per head, as America.

But it would be foolish to extrapolate from the rich world’s past to booming Asia’s future. The sort of environmental policies that are reducing the thirst for fuel in Europe and America by imposing ever-tougher fuel-efficiency standards on vehicles are also being adopted in the emerging economies. China recently introduced its own set of fuel-economy measures. If, as a result of its determination to reduce its dependence on imported oil, the regime imposes policies designed to “leapfrog” the country’s transport system to hybrids, oil demand will come under even more pressure.

Basically, our policies and technological advances are working to constrain our demand for oil. It seems there will be enough of these to match the decline in production of oil with a decline in demand. I imagine this sits really badly with my friends in the environmental movement who have been praying and hoping for peak oil to crash our technological civilisation once and for all. I chalk all this up to Schumpeter and his creative destruction of values as well as the Kurzweil vision of a Technological Singularity. Collectively, we seem to be accelerating to a point of development, not slowing down. Calling this cargo-ism seems to be just as ideologically motivated as the sort of people who wanted peak oil to cripple our civilisation.

Certainly, this is an interesting vision of the near future:

The biggest impact of declining demand could be geopolitical. Oil underpins Vladimir Putin’s kleptocracy. The Kremlin will find it more difficult to impose its will on the country if its main source of patronage is diminished. The Saudi princes have relied on a high oil price to balance their budgets while paying for lavish social programmes to placate the restless young generation that has taken to the streets elsewhere. Their huge financial reserves can plug the gap for a while; but if the oil flows into the kingdom’s coffers less readily, buying off the opposition will be harder and the chances of upheaval greater. And if America is heading towards shale-powered energy self-sufficiency, it is unlikely to be as indulgent in future towards the Arab allies it propped up in the past. In its rise, oil has fuelled many conflicts. It may continue to do so as it falls. For all that, most people will welcome the change.

If this indeed comes to pass, the world is going to be a very different place to the 'Peak Oil' scenario.

Peak Oil Is Knocking

Today's Peak Oil Article

Here it is.

Peak oil is forcing its way to the top of the agenda with stark warnings from the International Energy Agency and others repeated on ABC radio and television this week, after an investigation by the Catalyst program.
Following up a similar program she made in 2005, journalist Jonica Newby gained a rare interview with the IEA chief economist, Fatih Birol, who said crude oil production peaked in 2006 and, in veiled terms, added governments should have started working seriously on the problem a decade ago and warned of the threat of more oil wars.

Whereas five years ago the agency expected total production - including oil from deep-sea drilling and unconventional sources such as tar sands - could rise to 120 million barrels a day by 2030, the agency now expects production will reach only 96 million barrels. And Birol reckons there are no guarantees it can be brought out of the ground in a timely fashion.

''Existing fields are declining so sharply that in order to stay where we are in terms of production levels, in the next 25 years we have to find and develop four new Saudi Arabias. That is a huge challenge.''

If you're unsure of the general outline of the argument for Peak Oil, here's the helpful Wikipedia entry with the usual caveats about Wikipedia. Even the mighty Russian fields peaked in 2007 according to Wikipedia. If you want to read in more depth, here's a cool link.

Anyway, back to the article:

Desperately needed, of course, is a policy to tackle both peak oil and climate change at the same time.
Last year the think tank Beyond Zero Emissions, with Melbourne University's Energy Research Institute, published its Zero Carbon Australia Stationary Energy Plan, which shook things up by calling for investment of $37 billion a year to switch the whole country over to 100 per cent renewable energy within a decade. The plan included enough installed energy capacity to power all our transport needs.

Beyond Zero has assembled a team of scientists, engineers and planners working pro bono on a fully costed, national transport plan that will take in three streams: city passenger and public transport, freight, and intercity transport and high-speed rail.

Workshops are under way, drafts are circulating and the report is due out by the end of the year.
The executive director, Matthew Wright, says the opportunity for Australia is there to invest in new, climate-friendly transport infrastructure and avoid spending on high-priced oil imports, which Beyond Zero estimates could exceed $50 billion a year by 2015. ''That's what I call a great big tax,'' says Wright.

That should be the take home message for now. our politicians are barely on the edge of the crux of the problem, and they're whipping up the wrong frenzy. Somewhere in the midterm, our dependence on oil could cripple our economy when it becomes impossible to move things around this country without oil. It's on the cards, it's part of the complex problem that gives rise to the need to prepare infrastructure for alternative energy sources. If one thing could contribute to the popping of the Australian Property Bubble, it would be the rising cost of oil.If people value the investment value of their houses, they might consider moving to alternative energies faster, not slower; and in turn stop whinging about the Carbon pricing because that is the mechanism by which the technology will be funded.

Opaque Forecasts For Oil

Whither Peak Oil

I don't get it, I guess. There's the school of thought that the production of oil is either about to peak, or has peaked, or is at its peak as we speak. That's the theory known as 'Peak Oil'.

In Time Magazine, there's an article about how some of the diplomatic cables leaked reveal that Saudi Arabia is overstating its oil reserves by 40%.

A cable from December 2007 tells the story. U.S. diplomats in the Saudi capital of Riyadh met with al-Husseini. The American representatives had been told earlier by current Aramco executives that the company had 716 billion barrels of total oil reserves, of which just over half were considered recoverable. ("Recoverable" oil means that petroleum that is economically worth the cost of getting it out of the ground.) Current Aramco executives believed that in 20 years the company would have over 900 billion barrels in reserves, and that advances in technology would mean that 70% of it would be recoverable—good news for those who want to keep oil prices from rising in the future.

But al-Husseini, the former Aramco exec, told the U.S. diplomats that his successors were far too optimistic. He said that Aramco was overstating its reserves by as much as 300 billion barrels. He believes that Saudi Arabia has approximately 360 billion barrels of proven reserves—meaning oil that has already been produced or which can be exploited with current technology. Al-Husseni said that once 50% of those reserves had been produced, the country would reach an inflection point, resulting in a slow and steady decline in output. He also believes that inflection point would be reached in 14 years at current rates of production (12 million barrels a day), and that it would be followed by a plateau in output and then a decline. Al-Husseini also told American diplomats that Saudi Arabia lacked the engineers and other resources to push production to the max.

That all fits the theory of Peak Oil that's been bandied about since the late 1990s.

Yet at the same time, I read this article on the very same day.

A new drilling technique is opening up vast fields of previously out-of-reach oil in the western United States, helping reverse a two-decade decline in domestic production of crude.

Companies are investing billions of dollars to get at oil deposits scattered across North Dakota, Colorado, Texas and California. By 2015, oil executives and analysts say, the new fields could yield as much as 2 million barrels of oil a day — more than the entire Gulf of Mexico produces now.

This new drilling is expected to raise U.S. production by at least 20 percent over the next five years. And within 10 years, it could help reduce oil imports by more than half, advancing a goal that has long eluded policymakers.

"That's a significant contribution to energy security," says Ed Morse, head of commodities research at Credit Suisse.

Oil engineers are applying what critics say is an environmentally questionable method developed in recent years to tap natural gas trapped in underground shale. They drill down and horizontally into the rock, then pump water, sand and chemicals into the hole to crack the shale and allow gas to flow up.

Because oil molecules are sticky and larger than gas molecules, engineers thought the process wouldn't work to squeeze oil out fast enough to make it economical. But drillers learned how to increase the number of cracks in the rock and use different chemicals to free up oil at low cost.

"We've completely transformed the natural gas industry, and I wouldn't be surprised if we transform the oil business in the next few years too," says Aubrey McClendon, chief executive of Chesapeake Energy, which is using the technique.

So it seems there's more oil to be squeezed out of the earth, depending on the technique. The previous theory was that it was hard to access but this is being turned on its head. Presumably if these can help America find more oil, then surely the same techniques can be used to extract more oil in the Middle East. This would then account for this article.

The reality is that we are in uncharted waters. The world has never, ever seen anything like the rise of major developing countries like China and India—over a billion people growing into the middle class, demanding meat, cars, planes, electricity. Just because we proved smart enough to innovate our way out of periods of past growth doesn't mean we'll be able to handle a world with 9 billion plus people by 2050, most of them richer than now. We may already see that impact on the U.S., which will likely have to dig its way out of recession with the added burden of high energy prices thanks to healthy demand from the developing world.

It's actually hard to see if 'Peak Oil' will play out the way the theory predicts. If they keep finding oil, and in the case of Russians - they're finding them in odd places but they do find them - it seems we'll have more than plenty. The question is how are we going to control all that carbon getting emitted. I guess that's another problem altogether.

For those who like reading way-out-there things on the internet, I'll share this link with you. This one in particular is way way way out there.

From The Mailbox

From Russia With Political Intent

This came in from Pleiades who is always on the look out for shifts in the global geopolitical game.

Prime Minister Vladimir Putin launched Russia's long-awaited Siberian oil export route Monday, giving energy-hungry Asia a new supply source from the world's largest crude exporter seeking to diversify its client base away from Europe.

Putin, clad in a heavy winter parka, pushed a button that initiated the first filling of an oil tanker bound for Hong Kong at a new oil terminal near the Russian Pacific port of Nakhodka, the projected terminus of the new Siberian oil pipeline.

"For Russia this is truly a serious event," Putin said during the terminal inauguration ceremony at the port of Kozmino near Nakhodka, in comments broadcast on state television.

"This is a strategic project because it allows us to enter completely new, growing, promising markets of the Asian Pacific region," Putin said.

"This is the completion of one of the largest projects in modern Russia. And not only modern Russia. It would be a grandiose project for the former Soviet Union too."

Earlier this year, Russian oil pipeline monopoly Transneft completed the construction of the first 2,694-kilometre (1,600-mile) section of the oil pipeline known by the acronym ESPO (Estern Siberian Pacific Ocean) linking Taishet in eastern Siberia with Skovorodino in the Amur region.

This portion of the project also included the construction of the Kozmino oil port inaugurated by Putin.

The second portion, a 2,100-kilometre (1,300-mile) stretch of pipeline, will run from Skovorodino to the Kozmino port.

For now, oil is being delivered by rail from Skovorodino to the Kozmino port where it is then to be pumped into tankers for shipment to markets in Asia.

Putin said the state-of-the-art terminal, which he praised as "eye candy," had cost 60 billion rubles (two billion US dollars) to build.

One would think such a pipeline cements the close ties between Russia and China as well as increase the pressure on the Arab Oil exporters to sell more oil, faster and cheaper. Not good for the global warming thing, but doubly, given the likelihood of peak oil scenarios, this is going to be very interesting how the diminishing oil resources are going to be accessed.

One ramification for America is that it is conceivable that the USA, Europe and Japan reach the bottom of the Saudi and Iraqi supply way before the Russians and Chinese exhaust their supply.

Medieval Records Show...


Here's another interesting article from Pleiades about Global Warming.

The study found evidence for periods of significant warmth (890 - 1170) in the Northern Hemisphere during medieval times and for clearly colder periods (1580 - 1850) during the so-called "Little Ice Age".

Their key conclusion was that the 20th century stands out as having unusually widespread warmth, compared to all of the natural warming and cooling episodes during the past 1,200 years.

The research team gathered climate change data from a number of regions in the Northern Hemisphere especially:

Long life evergreen trees growing in Scandinavia, Siberia and the Rockies, which had been cored to reveal the patterns of wide and narrow tree rings over time -- wider rings relating to warmer temperatures.

Ice from cores drilled in the Greenland ice sheets revealed which years were warmer than others by the chemical composition of the ice.

They also used a record developed from diaries of people living in the Netherlands and Belgium over the past 750 years that revealed for example the years when the canals froze.

I particularly liked the bit where they took records of when the canals froze as a reference. The Global Warming deniers are ever louder in their denials about what the scientists are saying. Here's a sample of Lord Monckton:

Well, after a decade and a half with no statistically significant "global warming", and after three decades in which the mean warming rate has been well below the ever-falling predictions of the UN's climate panel, that notion has not been disproved in reality.

However, the question I address is whether the cost of taking action is many times greater than the cost of not acting? The answer is yes.

Millions are already dying of starvation in the world's poorest nations because world food prices have doubled in two years. That was caused by a sharp drop in world food production, caused by suddenly taking millions of acres of land out of growing food for people who need it, to grow biofuels for clunkers that don't. The policies that you advocate are killing people by the million. At a time when so many of the world's people are already short of food, the UN's right-to-food rapporteur, Herr Ziegler, has rightly condemned the biofuel scam as "a crime against humanity".

Yet this slaughter is founded upon a lie: the claim by the IPCC that it is 90 per cent certain that most of the "global warming" since 1950 is man-made. This claim - based not on science but on a show of hands among political representatives, with China wanting a lower figure and other nations wanting a higher figure - is demonstrably false. Peer-reviewed analyses of changes in cloud cover over recent decades - changes almost entirely unconnected with changes in CO2 concentration - show that it was this largely natural reduction in cloud cover from 1983-2001 and a consequent increase in the amount of short-wave and UV solar radiation reaching the Earth that accounted for five times as much warming as CO2 could have caused.

Nor is the IPCC's great lie the only lie in the official documents of the IPCC and in the speeches of its current chairman, who has made himself a multi-millionaire as a "global warming" profiteer.

It is also a fact that, while those of the UN's computer models that can be forced with an increase in sea-surface temperatures all predict a consequent fall in the flux of outgoing radiation at top of atmosphere, in observed reality there is an increase.

In short, the radiation that is supposed to be trapped here in the troposphere to cause "global warming" is measured as escaping to space much as usual, so that it cannot be causing more than about one-fifth of the warming the IPCC predicts.

He doesn't seem to be aware of global dimming that is masking the global warming effect and that the likely outgoing radiation is a result of the pollution particles in the air. In fact, the more you read Monckton's article you get the feeling of a man trying to construct a straw man out of global warming and taking immense satisfaction in beating the straw man.

It's classic private school debating bullshit, where if you spin bullshit hard enough, you might persuade the world to your ways. Well, physical reality says otherwise.But Tony Abbott indulges in this crap too, an he's now the Leader of Opposition. You sort of wonder where it's all going to go. I guess that as long as they deny it, their coal mining friends an coal-fire power generator owning friends don't have to fork out the money to pay for the carbon they're throwing in the atmosphere.

Talk about having their heads in the sand.

Bad News All Around

IMF Alert On Food Price Crisis

Fuel prices are surging. This has led to people wanting to try Bio-Diesel. The problem is that the Bio-Diesel firms are making their diesel fuel from staple food crops such as corn and wheat which in turn is driving up these staple crop prices. Naturally, this is creating a food price crisis.

The United Nations Food and Agriculture Organisation says 37 countries face food crises. The president of the World Bank, Robert Zoellick, urged members on Sunday to provide $US500 million ($540 million) by May 1 to help alleviate the problem.

There have been serious disturbances in more than a dozen developing countries, including Haiti, where a Nigerian peacekeeper serving with the United Nations police force was dragged from his car and shot dead as he was taking food to his colleagues on Saturday.

Violence had flared in Haiti's capital, Port-au-Prince, following the dismissal of the prime minister, Jacques Edouard Alexis, earlier in the day and the announcement of a plan to slash the price of rice. A week of hunger-provoked protests and looting has left six people dead, and aid workers say volatile protests are likely to continue because of sustained high food prices. Haiti imports almost all its food, and global food prices have risen 40 per cent since the middle of last year.

Mamadou Mbaye, who heads the UN World Food Program's office in Haiti, said fixing Haiti's systemic problems, such as unemployment and dependence on imported food, could not be accomplished immediately, meaning unrest could continue.

"Some measures will generate results in the long term … but whether people will be willing to wait for that is another issue."

In the Bangladeshi capital, Dhaka, 20,000 workers rioted over high food prices and low wages on Saturday. There have also been protests in neighbouring India.

Some experts, including Mr Zoellick and the British Government's chief scientific adviser, Professor John Beddington, have identified the growth of biofuels as one of the main causes of higher food prices.

The UN says 232 kilograms of corn is needed to fill a 50-litre car tank with ethanol - enough to feed a child for a year. Last week the UN predicted massacres unless the biofuel policy was halted.

Jacques Diouf, of the Food and Agriculture Organisation, said: "The world food situation is very serious: we have seen riots in Egypt, Cameroon, Haiti and Burkina Faso. There is a risk that this unrest will spread in countries where 50 per cent to 60 per cent of income goes to food. The reality is that people are dying already. Naturally people won't be sitting dying of starvation, they will react."

And we still can't stop using carbon based fuels. Our civilisation is totally hooked on oil.
There are trials in Scandinavia to try and use a Hydrogen based model, but there is one fatal flaw in that system - energy is required to separate the H2 from the H2O in the first place. So a Hydrogen-based automobile fleet will only be feasible if there is an energy system to do the H2 de-coupling. i.e. there is no Hydrogen energy economy as such.
In Iceland, they use geothermal energy to accomplish this feat. However, if we use oil, it would be meaningless.

The bottom line is that if oil prices keep going up, food prices will go up with it, regardless. If people are serious about Bio-Diesel, they had better figure out a way of supplying the demand without resorting to food crops.

The other bad news in all of this is that the re-shuffling of the deck chairs in a world after the era of cheap crude oil is underway. A lot of lives are going to fall astray, and we can expect a lot more refugees and collapsed states in the years to come. If people have a bright idea about how to change our energy source for our civilisation, now would be a good time to step forwards with it.