Oil Shockwave?

We all seem to have differing opinions as to how, or if, the fallout from Katrina is related to Peak Oil. I think I'm of the opinion that it's not related to the peaking of supply per se, but the way in which we deal with this situation has some very real ramifications for how this country will deal with future—and not temporary—supply disruptions.

A diarist at Daily Kos compares the situation after Katrina to the Oil Shockwave simulation that she witnessed in Torrence, CA a couple of weeks ago. She quickly moves into explaining why this situation should be a push for Americans to seek alternative forms of energy for transportation, but it's kind of an interesting read.

You may recall that Oil Shockwave is a simulation that has taken place two times: once in Washington DC in June, and once in California in August. In an article called "Outcome Grim at Oil War Game", the Washington Post described the cause of the oil shocks in the simulation:
The exercise began with ethnic unrest in Nigeria, leading to the collapse of the oil industry in that west African nation. Then al Qaeda launched crippling attacks on key energy facilities in Valdez, Alaska, and Saudi Arabia.
In the timeline of the simulation, gas prices started at $58/barrel (mid-December), then went to $80 at news of political unrest in Nigeria (December 14), to $120 when coordinated explosions in Saudi Arabia and Alaska forced a natural gas plant and the Trans-Alaska pipeline to close and to $160 when violence in Saudi Arabia forced foreign workers to leave the country.

What will it take? Will Katrina be enough to make the situation look something like Oil Shockwave? Perhaps more importantly, will it make the government worried enough to follow the advice of the Oil Shockwave participants?

The participants concluded almost unanimously that they must press the president to invest quickly in promising technologies to reduce dependence on overseas oil, such as hybrid cars powered by gasoline and plug-in electricity; and cars that run on fuels derived from prairie grasses, animal waste and other products. They all agreed these projects would take years to yield any benefit but should not wait for the kind of crisis they were dramatizing.
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I don't think Katrina will be enough. It will take more. At $70 a barrel, oil's still cheap and alternatives are still expensive. The prices of oil, natural gas and gasoline continue to rise in the near term as assessments keep coming in from the Gulf. Short of terrorism or another devastating hurricane, we won't see prices as high as $100. In capitalism, its very hard to overcome the inherent pull to the less expensive alternative, so I don't think we'll start investing in alternatives quiet yet.
Lots of information worth reading here

Good news:  LOOP OK, Fourchon OK, Henry Hub operational.  
Unknown: Condition of refineries, usability of channel at Fourchon, conditions of pipelines to Henry Hub.

Lots of good analysis on the situation over there.  Marketwatch has some other, related stories as well.

any idea when LOOP will open?  and even if open, how effective is it in regards to employees being able to access it, roads leading up to it are above water, etc...
My point has been and will continue to be that "peak oil" will make this human tragedy worse than it has to be.  It will become incrementally harder and more costly to replace the necessary supply, and because of that, there should be economic consequences as we begin to understand the breadth and depth of the damage.  

Will we adapt because of this one stimulus?  No.  It will take more...and that will take time and more supply difficulties (ergo, higher prices) to make us, as a individual parts of a collective, make the choices that need to be made.

The supply could be offset by a short-term cut in demand; say, the President asking people to drive 55 MPH for a few weeks and to coast up to red lights instead of rushing them.

Such simple things could do it.  But will Bush ever say such a thing to the nation?  No, the man's constitutionally incapable of saying what needs to be said, and that's one reason he's unfit for the office he sits in.

Agree with the first comment and PG -- it will take more than $70 oil and one event, assuming that most of GOM production is available in a foreseeable time frame and that most of refinery capacity can come back on line and that heating oil doesn't become a problem severe enough to cause folks to freeze in the winter or go bankrupt keeping warm... then indeed, there will need to be another stimulus.

One day at a time here.

Let's take a closer look at this.
The scenario removed only 3.5 million barrels of oil from a global market of more than 83 million barrels, resulting in the following consequences:

1 Gasoline prices of $5.74 per gallon;
2 Global oil price of $161 per barrel;
3 Heating oil prices of $5.14 per gallon;
4 Fall of gross domestic product for two consecutive quarters;
5 Drop in consumer confidence by 30 percent;
6 Spike in the consumer price index to 12.6 percent;
7 Ballooning of the current accounts deficit to $1.087 trillion;
8 Decline of 28 percent in the S&P 500;
9 Aggressive pressure on the US from China to end arm sales to Taiwan
10 Demands from Saudi Arabia for changes to US policy regarding the Mid-East peace process.
Obviously, we need one more big blow to supplies (1.5 - 2 mbd) to get the scenario going. This has to happen in the timeframe provided by GOMEX US supply shortfall. The US is seriously vulnerable to a terrorist attack right now but Al-Quaida and similar groups seem to work on their own timetable and not as opportunities arise. So, I consider that unlikely. What else? A major producer goes off-line or their exports are severely curtailed. Candidates: Saudi Arabia, Russia, Iran, Mexico, UAE, Kuwait, Venezuela. All of these countries are mostly politically stable a the moment, so I don't see this happening. What else? Two "middle" producers go offline at the same time (e.g Nigeria and Ecuador). This could happen--we have flirted with this scenario lately.

All in all, I don't see Oil Shockwave happening right now but others may think differently or have additional scenarios to consider.
I have been watching the Oil industry very closely for over a year and one thing is clear, this country is totally screwed. Hopefully I am wrong, but I don't thing so. Within the next few days, we will begin to experience fuel shortages followed by the food and goods shortages. The cascade effect will kick in and accelerate until the country devolves into a steaming pile of shit.

I feel for everyone who is affected by Katrina and I hope it all ends well. But frankly, this needed to happen to kick people in the teeth and get them to wake up. Our out of control consumption and increasing reliance on foreign petroleum is the root cause of what is about to invade this country. Until we replace all fossil fuels with an environmentally safe resource, we will be forever controlled by dead dinosaurs.

Now the kicker, there exists a resource that can replace 100% of all fossil fuels on this planet. And do it forever if properly managed and without destroying the environment. It would solve all our global warming and green house gas issues while allowing for unprecedented expansion of energy production never seen before.

The future is energy, what are we waiting for?

Re: "The cascade effect will kick in and accelerate until the country devolves into a steaming pile of shit"

That ("the steaming pile") has been on-going since 1980 when Ronald Reagan was elected. But what, then, is the energy source you refer to? The Sun? Perhaps you can identify yourself and not post here without background information on yourself and what you are talking about.