View Poll Results: Opinion on "Peak Oil" Theories...
I don't know, need to do more research
8
9.09%
High energy prices will self correct and we'll see fresh lows
16
18.18%
The era of cheap fossil fuels is over and we're staring at the abyss
57
64.77%
I don't give a fuzz, my next car will be a gas guzzling SUV
7
7.95%
Voters: 88. You may not vote on this poll
Your opinion on "Peak Oil" Theory
05-29-2008, 06:19 PM
#161
I feel the need...
Thread Starter
Global Demand Squeezing Natural Gas Supply
The cost of a gallon of gas gets all the headlines, but the natural gas that will heat many American homes next winter is going up in price as fast or faster.
That fact makes the scene in the languid, alligator-infested marshland here in coastal Louisiana all the more remarkable.
Only a month after Cheniere Energy inaugurated its $1.4 billion liquefied natural gas terminal here, an empty supertanker sat in its berth with no place to go while workers painted empty storage tanks.
The nearly idle terminal is a monument to a stalled experiment, one that was supposed to import so much L.N.G. from around the world that homes would be heated and factories humming at bargain prices.
But now L.N.G. shipments to the United States are slowing to a trickle, and Cheniere and other companies have dropped plans to build more terminals.
A longstanding assumption of American energy policy has been that natural gas would be plentiful abroad, and therefore readily available for importation, as production falls off in North America, where many fields are tapped out.
But some experts are starting to question that idea, saying natural gas could be subject to the same explosion in overseas demand that has made oil so expensive.....
That fact makes the scene in the languid, alligator-infested marshland here in coastal Louisiana all the more remarkable.
Only a month after Cheniere Energy inaugurated its $1.4 billion liquefied natural gas terminal here, an empty supertanker sat in its berth with no place to go while workers painted empty storage tanks.
The nearly idle terminal is a monument to a stalled experiment, one that was supposed to import so much L.N.G. from around the world that homes would be heated and factories humming at bargain prices.
But now L.N.G. shipments to the United States are slowing to a trickle, and Cheniere and other companies have dropped plans to build more terminals.
A longstanding assumption of American energy policy has been that natural gas would be plentiful abroad, and therefore readily available for importation, as production falls off in North America, where many fields are tapped out.
But some experts are starting to question that idea, saying natural gas could be subject to the same explosion in overseas demand that has made oil so expensive.....
05-29-2008, 06:27 PM
#162
I feel the need...
Thread Starter
Double, double, oil and trouble
Is it “peak oil” or a speculative bubble? Neither, really
http://www.economist.com/displayStor...src=nwlbtwfree
AFTER oil hit its recent record of $135 a barrel, consumers and politicians started to lash out in every direction. Fishermen in France have been blockading ports and pouring oil on the roads in protest. British lorry drivers have paraded coffins through London as a token of the imminent demise of the haulage industry. In response, Gordon Brown, Britain's prime minister, is badgering oil bosses to increase production from the North Sea, while Nicolas Sarkozy, the president of France, wants the European Union to suspend taxes on fuel.
In America, too, politicians are haranguing oil bosses and calling for tax cuts. Congress has approved a bill to prevent the government from adding to America's strategic stocks of oil, and is contemplating another to enable American prosecutors to sue the governments of the Organisation of the Petroleum Exporting Countries (OPEC) for market manipulation.
But the most popular scapegoats are “speculators” of the more traditional sort. OPEC itself routinely blames them for high prices. The government of India is so sure that speculation makes commodities dearer that it has banned the trading of futures contracts for some of them (although not oil). Germany's Social Democratic Party proposes an international ban on borrowing to buy oil futures, on the same grounds. Joe Lieberman, chairman of the Senate's Homeland Security Committee, is also mulling regulation of some sort, having concluded that “speculators are responsible for a big part of the commodity price increases”. The assumption underlying such ideas is that a bubble is forming, and that if it were popped, the price of oil would be much lower.
Others assume the reverse: that the price is bound to keep rising indefinitely, since supplies of oil are running short. The majority of the world's crude, according to believers in “peak oil”, has been discovered and is already being exploited. At any rate, the size of new fields is diminishing. So production will soon reach a pinnacle, if it has not done so already, and then quickly decline, no matter what governments do.
As different as these theories are, they share a conviction that something has gone badly wrong with the market for oil. High prices are seen as proof of some sort of breakdown. Yet the evidence suggests that, to the contrary, the rising price is beginning to curb demand and increase supply, just as the textbooks say it should.....
In America, too, politicians are haranguing oil bosses and calling for tax cuts. Congress has approved a bill to prevent the government from adding to America's strategic stocks of oil, and is contemplating another to enable American prosecutors to sue the governments of the Organisation of the Petroleum Exporting Countries (OPEC) for market manipulation.
But the most popular scapegoats are “speculators” of the more traditional sort. OPEC itself routinely blames them for high prices. The government of India is so sure that speculation makes commodities dearer that it has banned the trading of futures contracts for some of them (although not oil). Germany's Social Democratic Party proposes an international ban on borrowing to buy oil futures, on the same grounds. Joe Lieberman, chairman of the Senate's Homeland Security Committee, is also mulling regulation of some sort, having concluded that “speculators are responsible for a big part of the commodity price increases”. The assumption underlying such ideas is that a bubble is forming, and that if it were popped, the price of oil would be much lower.
Others assume the reverse: that the price is bound to keep rising indefinitely, since supplies of oil are running short. The majority of the world's crude, according to believers in “peak oil”, has been discovered and is already being exploited. At any rate, the size of new fields is diminishing. So production will soon reach a pinnacle, if it has not done so already, and then quickly decline, no matter what governments do.
As different as these theories are, they share a conviction that something has gone badly wrong with the market for oil. High prices are seen as proof of some sort of breakdown. Yet the evidence suggests that, to the contrary, the rising price is beginning to curb demand and increase supply, just as the textbooks say it should.....
05-29-2008, 07:30 PM
#163
Moderator Alumnus
I wonder if oil shale will be a campaign issue this fall 
The country also has additional oil reserves that are not included in traditional estimates, which could change the equation, said Rep. Mike Pence, R-Ind.
The United States has the world's largest known deposit of oil shale -- rock containing petroleum-like liquids -- largely on federal lands in Utah, Wyoming and Colorado. These rocks contain an estimated 1.23 trillion barrels of oil, according to the federal Bureau of Land Management, a section of the U.S. Department of the Interior.
"On what basis do we dismiss 110 years of (oil supply in) potential oil shale reserves?" Pence asked the witnesses at Thursday's hearing.
Several companies are trying to develop the resource, but it is more difficult to produce oil from shale than traditional reserves. The rock must be mined, crushed and heated, and then the resulting liquid has to be separated and collected. Despite these difficulties, the real obstacle preventing development lies in government regulations and opposition from environmentalists, said Jim Hansen, consultant for the Oil Shale Exploration Co., an Alabama-based company that hopes to produce oil from shale deposits in Utah.
"There are tons of regulations," said Hansen, a former U.S. congressman from Utah. "Just to cut the weeds, they want an environmental impact statement. And every time we get a permit, someone challenges it."
At a time of rising oil prices, Hansen said he doesn't understand why Congress and the rest of the country haven't welcomed the new technology.
"We feel we can produce it for about $52 per barrel," he told United Press International.
http://www.upi.com/International_Sec...to_drill/3849/ (full article)
The United States has the world's largest known deposit of oil shale -- rock containing petroleum-like liquids -- largely on federal lands in Utah, Wyoming and Colorado. These rocks contain an estimated 1.23 trillion barrels of oil, according to the federal Bureau of Land Management, a section of the U.S. Department of the Interior.
"On what basis do we dismiss 110 years of (oil supply in) potential oil shale reserves?" Pence asked the witnesses at Thursday's hearing.
Several companies are trying to develop the resource, but it is more difficult to produce oil from shale than traditional reserves. The rock must be mined, crushed and heated, and then the resulting liquid has to be separated and collected. Despite these difficulties, the real obstacle preventing development lies in government regulations and opposition from environmentalists, said Jim Hansen, consultant for the Oil Shale Exploration Co., an Alabama-based company that hopes to produce oil from shale deposits in Utah.
"There are tons of regulations," said Hansen, a former U.S. congressman from Utah. "Just to cut the weeds, they want an environmental impact statement. And every time we get a permit, someone challenges it."
At a time of rising oil prices, Hansen said he doesn't understand why Congress and the rest of the country haven't welcomed the new technology.
"We feel we can produce it for about $52 per barrel," he told United Press International.
http://www.upi.com/International_Sec...to_drill/3849/ (full article)
05-29-2008, 07:37 PM
#164
Moderator Alumnus
Blame Congress for High Oil Prices:
To understand the depth of congressional complicity in the high price of gasoline, one must understand that crude oil prices explain 97% of the variation in the pretax price of gasoline. That price, which has risen to record levels, is set by the intersection of supply and demand. On the one hand, world-wide demand has accelerated mainly due to the rapid growth of China and India.
On the other hand, supply has been curtailed by the cartel-like behavior of foreign national oil companies, which control nearly 80% of world petroleum reserves. Faced with little competition in the production of crude oil, the members of this cartel benefit from keeping the commodity in the ground, confident that increasing demand will make it more valuable in the future. Despite its pious denunciations of the behavior of U.S. investor-owned oil companies (IOCs), Congress by its actions over the years has ensured the economic viability of the national oil company cartel.
It has done so by preventing the exploitation by IOCs of reserves available in nonpark federal lands in the West, Alaska and under the waters off our coasts. These areas hold an estimated 635 trillion cubic feet of recoverable natural gas – enough to meet the needs of the 60 million American homes fueled by natural gas for over a century. They also hold an estimated 112 billion barrels of recoverable oil – enough to produce gasoline for 60 million cars and fuel oil for 25 million homes for 60 years.
This doesn't even include substantial oil shale resources economically recoverable at oil prices substantially lower than those prevailing today. In an exchange between Sen. Orin Hatch (R., Utah) and John Hofmeister, president of Shell Oil Company during the May 21 Senate Judiciary Committee hearing, the point was made that anywhere from 800 million to two trillion barrels of oil are available from oil shale in Colorado, Utah and Wyoming.
If Congress really cared about the economic well-being of American citizens, it would stop fulminating against IOCs and reverse current policies that discourage, indeed prohibit, the production of domestic oil and natural gas. Even the announcement that Congress was opening the way for domestic production would lead to downward pressure on oil prices.
There is an historical precedent for such a step: Ronald Reagan's deregulation of domestic crude oil prices at the beginning of his first term. At the time, thanks to the decision by the Organization of Petroleum Exporting Countries (OPEC) to curtail output, the price of oil was at a level that in real terms is only now being matched. Domestic price controls ensured that the OPEC cartel would face little or no competition in the production of oil.
http://online.wsj.com/article/SB121201723656327625.html
On the other hand, supply has been curtailed by the cartel-like behavior of foreign national oil companies, which control nearly 80% of world petroleum reserves. Faced with little competition in the production of crude oil, the members of this cartel benefit from keeping the commodity in the ground, confident that increasing demand will make it more valuable in the future. Despite its pious denunciations of the behavior of U.S. investor-owned oil companies (IOCs), Congress by its actions over the years has ensured the economic viability of the national oil company cartel.
It has done so by preventing the exploitation by IOCs of reserves available in nonpark federal lands in the West, Alaska and under the waters off our coasts. These areas hold an estimated 635 trillion cubic feet of recoverable natural gas – enough to meet the needs of the 60 million American homes fueled by natural gas for over a century. They also hold an estimated 112 billion barrels of recoverable oil – enough to produce gasoline for 60 million cars and fuel oil for 25 million homes for 60 years.
This doesn't even include substantial oil shale resources economically recoverable at oil prices substantially lower than those prevailing today. In an exchange between Sen. Orin Hatch (R., Utah) and John Hofmeister, president of Shell Oil Company during the May 21 Senate Judiciary Committee hearing, the point was made that anywhere from 800 million to two trillion barrels of oil are available from oil shale in Colorado, Utah and Wyoming.
If Congress really cared about the economic well-being of American citizens, it would stop fulminating against IOCs and reverse current policies that discourage, indeed prohibit, the production of domestic oil and natural gas. Even the announcement that Congress was opening the way for domestic production would lead to downward pressure on oil prices.
There is an historical precedent for such a step: Ronald Reagan's deregulation of domestic crude oil prices at the beginning of his first term. At the time, thanks to the decision by the Organization of Petroleum Exporting Countries (OPEC) to curtail output, the price of oil was at a level that in real terms is only now being matched. Domestic price controls ensured that the OPEC cartel would face little or no competition in the production of oil.
http://online.wsj.com/article/SB121201723656327625.html
06-01-2008, 04:36 PM
#165
I feel the need...
Thread Starter
The Coming Energy Wars
Oil prices could hit $200 a barrel in the next few months. How the spike changes everything.
http://www.newsweek.com/id/139395
This spring, America hit a historic point. With average gas prices per gallon edging toward $4, America's notoriously profligate ways started to change fast. Americans are driving less, using mass transit more, buying fewer gas guzzlers, indeed shopping less wantonly in general, and lowering their previously unshakable confidence as consumers. Suddenly, Americans are acting differently; if not exactly like Swedes, then not quite like themselves, either. It's a shift that could change the world.
And there are more changes to come. So far the price shock has triggered the most obvious consumer shifts in the United States. Europeans, already greener, are also are buffered by a stronger currency, and Asians are protected from the spiking price of oil by subsidies that control the impact on gas prices at the pump. But if oil prices continue to rise, and the subsidy dam breaks, as seems likely, the energy revolution now transforming America will spread. "We sailed through $80 a barrel," notes energy authority Daniel Yergin, author of "The Prize: The Epic Quest for Oil, Money and Power" and chairman of Cambridge Energy Research Associates. "But that doesn't mean we'll sail through $200 a barrel. That sort of price would have enormous global consequences."
A year ago no one was talking about $200 oil, and now everyone in the markets is, for scary reasons. Oil prices climbed from $10 in 1999 to $95 last year without slowing the surging world economy, in large part because the markets believed the spike was at core driven by rising demand, particularly from India and China, which feeds growth. There was concern over supply, too, but nothing like the tumult prompted by the stranglehold OPEC imposed on the world in the 1970s, at least not until recent months. As the per-barrel price climbed over the last few months, with futures reaching $135 last week, the consensus began shifting to a new more gloomy view: that not only would long-term demand, led by China and India, continue to grow, but that the supply threats, including increasing conflict, falling investment, industry bottlenecks and downward estimates of big field reserves in major oil states—aren't going away any time soon. Now many (though not all) serious people take $200 oil—and the prospect of another '70s-style oil shock—seriously. Goldman Sachs warned that the $200 barrier could be hit within the next six to 24 months.....
And there are more changes to come. So far the price shock has triggered the most obvious consumer shifts in the United States. Europeans, already greener, are also are buffered by a stronger currency, and Asians are protected from the spiking price of oil by subsidies that control the impact on gas prices at the pump. But if oil prices continue to rise, and the subsidy dam breaks, as seems likely, the energy revolution now transforming America will spread. "We sailed through $80 a barrel," notes energy authority Daniel Yergin, author of "The Prize: The Epic Quest for Oil, Money and Power" and chairman of Cambridge Energy Research Associates. "But that doesn't mean we'll sail through $200 a barrel. That sort of price would have enormous global consequences."
A year ago no one was talking about $200 oil, and now everyone in the markets is, for scary reasons. Oil prices climbed from $10 in 1999 to $95 last year without slowing the surging world economy, in large part because the markets believed the spike was at core driven by rising demand, particularly from India and China, which feeds growth. There was concern over supply, too, but nothing like the tumult prompted by the stranglehold OPEC imposed on the world in the 1970s, at least not until recent months. As the per-barrel price climbed over the last few months, with futures reaching $135 last week, the consensus began shifting to a new more gloomy view: that not only would long-term demand, led by China and India, continue to grow, but that the supply threats, including increasing conflict, falling investment, industry bottlenecks and downward estimates of big field reserves in major oil states—aren't going away any time soon. Now many (though not all) serious people take $200 oil—and the prospect of another '70s-style oil shock—seriously. Goldman Sachs warned that the $200 barrier could be hit within the next six to 24 months.....
06-03-2008, 04:09 PM
#166
I feel the need...
Thread Starter
Dakota Oil Fields of Saudi-Sized Reserves Make Farmers Drillers
Originally Posted by Silver™
I wonder if people could re-vote, would the numbers change at all? 
John Bartelson, who smokes Marlboro Lights through fingers blackened with tractor grease, may look like an average wheat farmer. He isn't. He's one of North Dakota's new oil barons.
Every month, he gets a check for tens of thousands of dollars from a company in Houston called EOG Resources Inc., which drilled two oil wells on his land last year. He says the day his first royalty check arrived was one to remember.
``I smiled to beat hell, and I went to town and had a beer,'' Bartelson, 65, says.
His new wealth springs from the Bakken formation, a sprawling deposit of high-quality crude beneath the durum wheat fields of North Dakota, Montana and southern Saskatchewan and Manitoba. The Bakken may give the U.S. -- the world's biggest importer of oil -- a new domestic energy source at a time when demand from China and India is ratcheting up the global competition for supplies and propelling average U.S. gasoline prices to almost $4 a gallon.
And unlike the tar from Canada's oil sands, Bakken crude needs little refining. Swirl some of it in a Mason jar and it leaves a thin, honey-colored film along the sides. It's light - -almost like gasoline -- and sweet, meaning it's low in sulfur.
Best of all, the Bakken could be huge. The U.S. Geological Survey's Leigh Price, a Denver geochemist who died of a heart attack in 2000, estimated that the Bakken might hold a whopping 413 billion barrels. If so, it would dwarf Saudi Arabia's Ghawar, the world's biggest field, which has produced about 55 billion barrels.....
Every month, he gets a check for tens of thousands of dollars from a company in Houston called EOG Resources Inc., which drilled two oil wells on his land last year. He says the day his first royalty check arrived was one to remember.
``I smiled to beat hell, and I went to town and had a beer,'' Bartelson, 65, says.
His new wealth springs from the Bakken formation, a sprawling deposit of high-quality crude beneath the durum wheat fields of North Dakota, Montana and southern Saskatchewan and Manitoba. The Bakken may give the U.S. -- the world's biggest importer of oil -- a new domestic energy source at a time when demand from China and India is ratcheting up the global competition for supplies and propelling average U.S. gasoline prices to almost $4 a gallon.
And unlike the tar from Canada's oil sands, Bakken crude needs little refining. Swirl some of it in a Mason jar and it leaves a thin, honey-colored film along the sides. It's light - -almost like gasoline -- and sweet, meaning it's low in sulfur.
Best of all, the Bakken could be huge. The U.S. Geological Survey's Leigh Price, a Denver geochemist who died of a heart attack in 2000, estimated that the Bakken might hold a whopping 413 billion barrels. If so, it would dwarf Saudi Arabia's Ghawar, the world's biggest field, which has produced about 55 billion barrels.....
06-04-2008, 04:16 PM
#168
I feel the need...
Thread Starter
Originally Posted by Trackruner228
Alright anyone got an answer to why crude oil went down but gas went up?
06-04-2008, 04:19 PM
#169
I feel the need...
Thread Starter
Total Sees Crude Reserve Replacement at $80 a Barrel
World demand for oil may soon outstrip supply as the cost of replacing reserves reaches $80 a barrel, according to the head of Total SA, Europe's third- largest petroleum company.
``If we aren't careful in the next few years there will be a shortage of oil and gas to cover demand,'' Total Chief Executive Officer Christophe de Margerie told French deputies at a National Assembly commission in Paris today. ``New forms of energy won't come quickly enough to compensate.''
Total, along with Exxon Mobil Corp. and Royal Dutch Shell Plc, the world's two biggest publicly traded oil companies, are facing increasing barriers to oil and gas reserves as resource- holding nations favor national champions. The Paris-based company is also facing political pressure as French truckers and fishermen blockade refineries and ports to protest fuel prices.
Total's de Margerie fielded a barrage of questions from French deputies over the size of global reserves, rising oil prices and their impact on consumers.
The $80 a barrel cost of producing crude is a new ``technical'' floor for oil prices, he said, adding that they are likely to remain high in the future. According to Total, two years ago investment decisions were made on the basis of oil costing $40 a barrel.
``What has hurt most isn't the level of oil prices but the rate at which they have risen,'' he said.....
``If we aren't careful in the next few years there will be a shortage of oil and gas to cover demand,'' Total Chief Executive Officer Christophe de Margerie told French deputies at a National Assembly commission in Paris today. ``New forms of energy won't come quickly enough to compensate.''
Total, along with Exxon Mobil Corp. and Royal Dutch Shell Plc, the world's two biggest publicly traded oil companies, are facing increasing barriers to oil and gas reserves as resource- holding nations favor national champions. The Paris-based company is also facing political pressure as French truckers and fishermen blockade refineries and ports to protest fuel prices.
Total's de Margerie fielded a barrage of questions from French deputies over the size of global reserves, rising oil prices and their impact on consumers.
The $80 a barrel cost of producing crude is a new ``technical'' floor for oil prices, he said, adding that they are likely to remain high in the future. According to Total, two years ago investment decisions were made on the basis of oil costing $40 a barrel.
``What has hurt most isn't the level of oil prices but the rate at which they have risen,'' he said.....
Oh well $10 drop isnt that much anyway.
06-05-2008, 08:12 PM
#171
Moderator Alumnus
The rising price of oil could spark a second North Sea exploration boom to drain previously inaccessible reserves which experts estimate could run to 30 billion barrels.
The amount of fuel still left in the oilfields could be the equivalent of all that has been extracted since they were first exploited in the 1970s; enough to last another 44 years.
Experts explained that the high price of oil meant that it was now financially viable for firms to invest the vast sums required to remove it from depths and pressures that were previously too expensive.
Academics said up to 300 more fields around the British coasts could also bear fruit, as large areas of the UK's coast have never been fully examined.
http://www.telegraph.co.uk/news/2077...-reserves.html
Amazing how the "peak" can keep getting pushed back...
The amount of fuel still left in the oilfields could be the equivalent of all that has been extracted since they were first exploited in the 1970s; enough to last another 44 years.
Experts explained that the high price of oil meant that it was now financially viable for firms to invest the vast sums required to remove it from depths and pressures that were previously too expensive.
Academics said up to 300 more fields around the British coasts could also bear fruit, as large areas of the UK's coast have never been fully examined.
http://www.telegraph.co.uk/news/2077...-reserves.html
Amazing how the "peak" can keep getting pushed back...
06-06-2008, 09:05 PM
#172
I feel the need...
Thread Starter
Originally Posted by Silver™
Amazing how the "peak" can keep getting pushed back...
No one is disputing that there is plenty of fossil fuel still in the ground. The Peak Oil theorists are simply arguing that we've crossed the halfway point. In other words, we are depleting known reserves faster than new reserves can be cost efficiently brought online to keep pace with increasing demand.Its the equivalent of walking on a treadmill, you may be making forward progress but the treads are starting to oupace you.
I hope you have at least been smart enought to hedge your bets!
06-08-2008, 08:59 PM
#173
I feel the need...
Thread Starter
New world energy order
WITH high oil price and expectations that supply would dwindle as consumption continues to increase globally, some energy experts are anticipating a new world energy order in the future.
http://biz.thestar.com.my/news/story...3&sec=business
....In the essay Klare emphasised five key forces in the new world order which would change the planet:
Intense competition between older and newer economic powers for available supplies of energy: Until very recently, the mature industrial powers of Europe, Asia and North America consumed the lion's share of energy and left the dregs for the developing world. However, by 2010, the developing world's share of energy use is expected to reach 40% and, if current trends persist, 47% by 2030.
The insufficiency of primary energy supplies: The global supply of oil will expand for perhaps another half a decade before reaching a peak and beginning to decline, while supplies of natural gas, coal and uranium will probably grow for another decade or two before peaking and commencing their own inevitable declines.
The painfully slow development of energy alternatives: These alternatives, which now contribute only a tiny percentage of the world's net fuel supply, are simply not being developed fast enough to avert the multifaceted global energy catastrophe that lies ahead.
A steady migration of power and wealth from energy-deficit to energy-surplus nations: The transfer of wealth alone is already mind-boggling. The oil-exporting countries collected an estimated US$970bil from the importing countries in 2006, and the take for 2007, when finally calculated, is expected to be far higher.
A growing risk of conflict: Throughout history, major shifts in power have normally been accompanied by violence - in some cases, protracted violent upheavals.....
Intense competition between older and newer economic powers for available supplies of energy: Until very recently, the mature industrial powers of Europe, Asia and North America consumed the lion's share of energy and left the dregs for the developing world. However, by 2010, the developing world's share of energy use is expected to reach 40% and, if current trends persist, 47% by 2030.
The insufficiency of primary energy supplies: The global supply of oil will expand for perhaps another half a decade before reaching a peak and beginning to decline, while supplies of natural gas, coal and uranium will probably grow for another decade or two before peaking and commencing their own inevitable declines.
The painfully slow development of energy alternatives: These alternatives, which now contribute only a tiny percentage of the world's net fuel supply, are simply not being developed fast enough to avert the multifaceted global energy catastrophe that lies ahead.
A steady migration of power and wealth from energy-deficit to energy-surplus nations: The transfer of wealth alone is already mind-boggling. The oil-exporting countries collected an estimated US$970bil from the importing countries in 2006, and the take for 2007, when finally calculated, is expected to be far higher.
A growing risk of conflict: Throughout history, major shifts in power have normally been accompanied by violence - in some cases, protracted violent upheavals.....
06-09-2008, 12:24 AM
#174
Moderator Alumnus
Originally Posted by Fibonacci
No one is disputing that there is plenty of fossil fuel still in the ground. The Peak Oil theorists are simply arguing that we've crossed the halfway point. In other words, we are depleting known reserves faster than new reserves can be cost efficiently brought online to keep pace with increasing demand.Its the equivalent of walking on a treadmill, you may be making forward progress but the treads are starting to oupace you.
Peak Oil is not about production not keeping pace with demand. It is about production "peaking" and then declining.
As prices continue to rise, nearly every type of oil production, including deep sea, artic, tar sands, oil shale, coal oil, etc... become profitable.
At $140 a barrel, drilling for oil on the moon starts to seem like a reasonable investment
We will not hit a production peak for a while
I hope you have at least been smart enought to hedge your bets!
I've got the Prius on order
06-09-2008, 08:31 PM
#175
I feel the need...
Thread Starter
Originally Posted by Silver™
Peak Oil is not about production not keeping pace with demand. It is about production "peaking" and then declining.
As prices continue to rise, nearly every type of oil production, including deep sea, artic, tar sands, oil shale, coal oil, etc... become profitable.
And also very expensive.
At $140 a barrel, drilling for oil on the moon starts to seem like a reasonable investment
We will not hit a production peak for a while
I've got the Prius on order
06-09-2008, 08:41 PM
#176
I feel the need...
Thread Starter
BP's Hayward Says Era of Cheap Energy Prices Is Over
BP Plc Chief Executive Officer Tony Hayward said the era of cheap energy is over as oil production isn't rising fast enough to meet demand amid a lack of spending.
The energy industry is facing the challenges of climate change and ways of increasing supplies, Hayward said at the Asia Oil and Gas Conference in Kuala Lumpur today.
``Producers are being hampered by 25 years of low investments, because of low prices,'' he said. ``The result is a supply chain being stretched to breaking point.''
Exxon Mobil Corp., Royal Dutch Shell Plc, BP, Chevron Corp., Total SA and ConocoPhillips will spend a record $98.7 billion this year on exploration and production, Lehman Brothers Holdings Inc. estimates. Costs more than quadrupled since 2000 as explorers targeted more challenging reservoirs and demand rose for labor and materials.
If the industry is able to increase oil-recovery rates 5 percent above the current 35 percent, it would add about 170 billion barrels or five years' supply to global reserves, Hayward said.
Taxes and government share of oil and gas revenue have continued to increase across the world, hampering investments by explorers and producers, he said. State-run companies are demanding better terms as energy prices surge.....
The energy industry is facing the challenges of climate change and ways of increasing supplies, Hayward said at the Asia Oil and Gas Conference in Kuala Lumpur today.
``Producers are being hampered by 25 years of low investments, because of low prices,'' he said. ``The result is a supply chain being stretched to breaking point.''
Exxon Mobil Corp., Royal Dutch Shell Plc, BP, Chevron Corp., Total SA and ConocoPhillips will spend a record $98.7 billion this year on exploration and production, Lehman Brothers Holdings Inc. estimates. Costs more than quadrupled since 2000 as explorers targeted more challenging reservoirs and demand rose for labor and materials.
If the industry is able to increase oil-recovery rates 5 percent above the current 35 percent, it would add about 170 billion barrels or five years' supply to global reserves, Hayward said.
Taxes and government share of oil and gas revenue have continued to increase across the world, hampering investments by explorers and producers, he said. State-run companies are demanding better terms as energy prices surge.....
06-11-2008, 04:32 PM
#177
I feel the need...
Thread Starter
Global Crude Oil Production Dropped in 2007, BP Says
Originally Posted by Silver™
We will not hit a production peak for a while
Global oil production fell for the first time in five years in 2007 and reserves also declined as prices rose to records, BP Plc said in its annual Statistical Review of World Energy.
Crude oil production dropped 0.2 percent to 81.533 million barrels a day last year, from 81.659 million barrels a day in 2006, the London-based company said today. Proved reserves were 1,237.9 billion barrels at the end of last year, compared with a revised total of 1,239.5 billion barrels for 2006.
Crude oil prices have doubled in the last year as demand from China and India jumped and global production stagnated. That's fanning inflation and slowing global economic growth as manufacturers pass on higher costs and consumers are forced to spend more on fuel.....
Crude oil production dropped 0.2 percent to 81.533 million barrels a day last year, from 81.659 million barrels a day in 2006, the London-based company said today. Proved reserves were 1,237.9 billion barrels at the end of last year, compared with a revised total of 1,239.5 billion barrels for 2006.
Crude oil prices have doubled in the last year as demand from China and India jumped and global production stagnated. That's fanning inflation and slowing global economic growth as manufacturers pass on higher costs and consumers are forced to spend more on fuel.....
06-15-2008, 04:55 PM
#178
I feel the need...
Thread Starter
Saudi Arabia's Leverage In Oil Market Is Sapped
.....During past oil-price spikes, Saudi Arabia flexed its oil muscle and helped drive down prices by boosting its own exports. In 1998, during a market-share battle with Venezuela and non-OPEC suppliers like Russia, Saudi Arabia used the much heavier cudgel of pouring cut-rate crude onto the market and sent prices plunging.
Today's market is very different. With the emergence of giant consumers like China and India, producers have strained to meet demand. That has diminished the ability of Saudi Arabia to use its supply cushion to help modulate markets. That may not keep the Saudis from trying, however.
"The Saudis are increasingly seeing that it is in their long-term strategic interests to bring down prices," said David Kirsch, an oil analyst at PFC Energy in Washington. "What they are going to have to do, though, is very aggressively price whatever oil they offer."
Refiners not only would have to go to more trouble to refine the heavier crude, they also would have to be willing to spend money to put large amounts of the oil in storage, even at the risk that oil gets still cheaper before they are able to refine it. There are strong reasons to suggest that even a sharp boost in production may do little to blunt concerns within the industry.
For one, Saudi Arabia has now made clear that it may never increase its production capacity beyond 12.5 million barrels a day -- its target for the end of 2009 -- up from its current level of 11.4 million barrels a day. After that, all drilling and exploration could go to maintain that as the country's oil fields age.
That has added to fears over whether other suppliers can keep up with demand in the next decade.
Today's market is very different. With the emergence of giant consumers like China and India, producers have strained to meet demand. That has diminished the ability of Saudi Arabia to use its supply cushion to help modulate markets. That may not keep the Saudis from trying, however.
"The Saudis are increasingly seeing that it is in their long-term strategic interests to bring down prices," said David Kirsch, an oil analyst at PFC Energy in Washington. "What they are going to have to do, though, is very aggressively price whatever oil they offer."
Refiners not only would have to go to more trouble to refine the heavier crude, they also would have to be willing to spend money to put large amounts of the oil in storage, even at the risk that oil gets still cheaper before they are able to refine it. There are strong reasons to suggest that even a sharp boost in production may do little to blunt concerns within the industry.
For one, Saudi Arabia has now made clear that it may never increase its production capacity beyond 12.5 million barrels a day -- its target for the end of 2009 -- up from its current level of 11.4 million barrels a day. After that, all drilling and exploration could go to maintain that as the country's oil fields age.
That has added to fears over whether other suppliers can keep up with demand in the next decade.
07-10-2008, 07:04 PM
#179
I feel the need...
Thread Starter
The only way is down
The high priest of “peak oil” thinks world oil output can now only decline
http://www.economist.com/business/di...src=nwlptwfree
FOR a man who believes that the world as we know it is coming to an end, as least as far as energy is concerned, Matthew Simmons is remarkably cheerful. He magnanimously excuses The Economist’s poor record of predicting the price of oil: our suggestion in 1999 that oil would remain dirt cheap was conventional wisdom at the time, he says soothingly. He also shrugs off our more recent scepticism about his belief that the world’s production of oil has peaked: he, too, hopes that “peak oil” proves to be a myth, he says. But over a 40-year career in investment banking, Mr Simmons adds, he has learnt never to rely on wishful thinking. Most of the world’s oil analysts, he believes, are far too optimistic about how long existing fields will last, the prospects for new discoveries, technology’s ability to unlock new sources and to extend the life of existing ones, and so on. He prefers to rely on data rather than daydreams. And according to the American government’s own numbers, the world’s oil output has been more-or-less flat since 2005.
It was data that made Mr Simmons famous. He spent the summer of 2003 at his holiday home in Maine, poring over technical studies describing the state of Saudi Arabia’s oilfields. Although the Saudi authorities do not release much evidence to support their claims of vast oil reserves, engineers from Saudi Aramco, the state-owned oil firm, do give talks at conferences and publish papers about their experience of reservoir modelling and management. Based on these, Mr Simmons concluded that Saudi Arabia’s biggest fields were already past their peaks, required ever more expensive technological fixes to prop up production and would soon enter a period of inevitable and rapid decline.
Saudi grandees pooh-poohed Mr Simmons’s 2005 book on the subject, “Twilight in the Desert: the Coming Saudi Oil Shock and the World Economy”. But others held it up as convincing proof of the notion that the world’s oil production would soon reach a pinnacle, never to be exceeded. Saudi Arabia, after all, is already the world’s biggest producer, and is expected to cater to most of the growth in demand for oil over the next few years by expanding its output yet further. If, instead, it pumps less, there is little hope that other countries could make up the shortfall. In that scenario, as demand for oil continues to grow despite dwindling supplies, and as the search for substitutes proves fruitless, economic catastrophe ensues.....
It was data that made Mr Simmons famous. He spent the summer of 2003 at his holiday home in Maine, poring over technical studies describing the state of Saudi Arabia’s oilfields. Although the Saudi authorities do not release much evidence to support their claims of vast oil reserves, engineers from Saudi Aramco, the state-owned oil firm, do give talks at conferences and publish papers about their experience of reservoir modelling and management. Based on these, Mr Simmons concluded that Saudi Arabia’s biggest fields were already past their peaks, required ever more expensive technological fixes to prop up production and would soon enter a period of inevitable and rapid decline.
Saudi grandees pooh-poohed Mr Simmons’s 2005 book on the subject, “Twilight in the Desert: the Coming Saudi Oil Shock and the World Economy”. But others held it up as convincing proof of the notion that the world’s oil production would soon reach a pinnacle, never to be exceeded. Saudi Arabia, after all, is already the world’s biggest producer, and is expected to cater to most of the growth in demand for oil over the next few years by expanding its output yet further. If, instead, it pumps less, there is little hope that other countries could make up the shortfall. In that scenario, as demand for oil continues to grow despite dwindling supplies, and as the search for substitutes proves fruitless, economic catastrophe ensues.....
07-15-2008, 08:16 PM
#180
I feel the need...
Thread Starter
The Oracle of Oil Speaks
Charles Maxwell, the world's wisest energy analyst, says the crunch will only get worse
http://www.businessweek.com/magazine...gn_id=rss_null
.....So to all of you armchair Oliver Stones, I bring the wisdom of Charles Maxwell, senior energy analyst at trading-and-research shop Weeden & Co. Having spent 11 years in the oil patch and 40 more on Wall Street, this reserved 76-year-old is the elder statesman of energy research.
Ranked nine times by Institutional Investor as the No. 1 analyst in his field, the professorial Maxwell is sought out not just by fund managers but also by academics, carmakers, and Mideast sovereign wealth funds. He has been corresponding with me over the past three years, scrawling various asides in the margins. The good news is also the bad news: With the price of oil up 700% in seven years, Maxwell has been right. Visiting me in my office with a briefcase full of data, he now foresees unprecedented stress on the world economy as peak oil production arrives in or about 2015......
Ranked nine times by Institutional Investor as the No. 1 analyst in his field, the professorial Maxwell is sought out not just by fund managers but also by academics, carmakers, and Mideast sovereign wealth funds. He has been corresponding with me over the past three years, scrawling various asides in the margins. The good news is also the bad news: With the price of oil up 700% in seven years, Maxwell has been right. Visiting me in my office with a briefcase full of data, he now foresees unprecedented stress on the world economy as peak oil production arrives in or about 2015......
09-02-2008, 07:29 PM
#181
I feel the need...
Thread Starter
Boone Pickens Hits Bottom, Bounces Back, Rings Oil Alarm
``Show me a good loser, and I'll show you a loser,'' he says in one of many ``Booneisms'' that dot these pages, along with nods to his friend Arnold Schwarzenegger, his personal trainer and his papillon pooch Murdock.
Having established his credentials, Pickens moves on to his management tips -- ``help, don't hinder'' -- and a blunt summary of why we need to accept that the world is running out of oil.
``The Saudis claim they have 260 billion barrels in reserve,'' he writes. ``I don't believe them.....''
Having established his credentials, Pickens moves on to his management tips -- ``help, don't hinder'' -- and a blunt summary of why we need to accept that the world is running out of oil.
``The Saudis claim they have 260 billion barrels in reserve,'' he writes. ``I don't believe them.....''
09-23-2008, 08:30 PM
#182
I feel the need...
Thread Starter
Here comes $500 oil
If Matt Simmons is right, the recent drop in crude prices is an illusion - and oil could be headed for the stratosphere. He's just hoping we can prevent civilization from imploding.
http://money.cnn.com/2008/09/15/news...tune/index.htm
(Fortune Magazine) -- Matt Simmons is as perplexed as anyone that it has fallen to him to take on OPEC, Exxon, the Saudis, and all the other misguided defenders of conventional wisdom in the oil patch. Why should one investment banker with a penchant for research be required to point out what he regards as the obvious - that from here on out, oil supplies can't meet demand, and if we don't act soon to solve this crisis, World War III could be looming?
Why should a man who scorns most environmentalists have to argue that locally grown produce and wind power are the way of the future? Why should a lifelong Republican need to be the one to point out that his party's new mantra - "Drill, baby, drill!" - won't really fix anything and that his party's presidential candidate is clueless about energy? That the spike in oil prices earlier this year wasn't a temporary market anomaly and the recent retreat in prices is just a misleading calm before a calamitous storm? That we're headed toward $500-a-barrel oil?
"I find it ironic that here we have the biggest industry on earth, and I'm one of the few people to figure out that we have a major problem," he says, in his confident if not quite brash way. "And I did it all in my spare time. How stupid and tragic is that? I shouldn't be one of the only folks that actually has a handful of ideas of how we can keep from blowing each other up and get through this."
Indeed, Simmons isn't the obvious candidate to be the bearer of bad news about oil. He's spent his career working in the business, has lived in Houston for decades, and is such an industry insider that he helped edit the Bush campaign's comprehensive energy plan in the 2000 election - the document that was ultimately more or less rubber-stamped by Vice President Dick Cheney's infamous secret Energy Task Force. Over the past 35 years, his boutique investment bank, Simmons & Co., has helped finance and shape much of the country's existing oil-services business. With profits gushing, you might expect him to be celebrating.....
Why should a man who scorns most environmentalists have to argue that locally grown produce and wind power are the way of the future? Why should a lifelong Republican need to be the one to point out that his party's new mantra - "Drill, baby, drill!" - won't really fix anything and that his party's presidential candidate is clueless about energy? That the spike in oil prices earlier this year wasn't a temporary market anomaly and the recent retreat in prices is just a misleading calm before a calamitous storm? That we're headed toward $500-a-barrel oil?
"I find it ironic that here we have the biggest industry on earth, and I'm one of the few people to figure out that we have a major problem," he says, in his confident if not quite brash way. "And I did it all in my spare time. How stupid and tragic is that? I shouldn't be one of the only folks that actually has a handful of ideas of how we can keep from blowing each other up and get through this."
Indeed, Simmons isn't the obvious candidate to be the bearer of bad news about oil. He's spent his career working in the business, has lived in Houston for decades, and is such an industry insider that he helped edit the Bush campaign's comprehensive energy plan in the 2000 election - the document that was ultimately more or less rubber-stamped by Vice President Dick Cheney's infamous secret Energy Task Force. Over the past 35 years, his boutique investment bank, Simmons & Co., has helped finance and shape much of the country's existing oil-services business. With profits gushing, you might expect him to be celebrating.....
09-27-2008, 12:39 AM
#184
Safety Car
i know this is a car forum...although pump gas is on an unprecedented rise, building energy consumption is the real path for our future. car manufacturers will adjust themselves in the near future. but permanent construction is the largest concern. any of you guys LEED accredited??
11-13-2008, 07:04 PM
#185
I feel the need...
Thread Starter
World Needs a Kuwait a Year to Meet Demand, IEA Says
The world must find new oil production equivalent to Kuwait's existing output every year until 2030 to meet demand and counter the decline of existing fields, an International Energy Agency report showed.
The agency, an adviser to 28 nations, forecasts global oil demand will rise by 1 percent a year through 2030, while the rate of output decline at existing fields will accelerate to 8.6 percent from 6.7 percent. There must be ``adequate and timely'' investment in global oil output for supplies to suffice, the Paris-based IEA said in its annual World Energy Outlook published today.
``There remains a real risk that under-investment will cause an oil-supply crunch'' by 2015 as the decline in output from mature oilfields speeds up, the Paris-based adviser said. ``The gap now evident between what is currently being built and what will be needed to keep pace with demand is set to widen sharply after 2010.''
An additional 64 million barrels a day of additional production must be brought on stream between 2007 and 2030, the group said. That is about 2.78 million barrels a day every year. Kuwait currently produces about 2.6 million barrels a day, according to Bloomberg estimates.....
The agency, an adviser to 28 nations, forecasts global oil demand will rise by 1 percent a year through 2030, while the rate of output decline at existing fields will accelerate to 8.6 percent from 6.7 percent. There must be ``adequate and timely'' investment in global oil output for supplies to suffice, the Paris-based IEA said in its annual World Energy Outlook published today.
``There remains a real risk that under-investment will cause an oil-supply crunch'' by 2015 as the decline in output from mature oilfields speeds up, the Paris-based adviser said. ``The gap now evident between what is currently being built and what will be needed to keep pace with demand is set to widen sharply after 2010.''
An additional 64 million barrels a day of additional production must be brought on stream between 2007 and 2030, the group said. That is about 2.78 million barrels a day every year. Kuwait currently produces about 2.6 million barrels a day, according to Bloomberg estimates.....
Don't let these temporary low prices caused by a sharp contraction in global demand because of recession lull anyone into complacency. Wouldn't run out and jump back into a Hummer too quickly. :wink:
01-28-2009, 12:30 PM
#186
Moderator Alumnus
Interesting view:
Now that crude oil prices are down around $40 per barrel, the once widely quoted theory of "peak oil" appears to has been replaced by a new theory known as "peak demand".
This new theory contends that demand in the industrialized nations that make up the Organization for Economic Co-operation and Development (OECD), which has been eroding dramatically as a result of the recession, may have permanently peaked back in 2007.
Moreover, the theory also proposes that total global demand, including that of the energy hungry emerging markets, could also hit an upper limit as governments grow increasingly serious about implementing meaningful climate change policies.
One such policy could be promoting the greater use of hybrid or all-electric vehicles. An example of this is the stated goal of the new Obama administration to have one million plug-in hybrid cars on the road by 2015 that can get up to 150 miles per gallon. If this and similar initiatives around the world are successful, current projections for oil demand growth will have to be drastically revised.
According to the numbers laid out by the U.S. Energy Information Agency (EIA), global oil demand is projected to increase by about 35% between now and 2030, largely due to emerging market demand. About 74% of that increase is expected to be from transportation sector demand. The key assumption behind this forecast is that populations in India and China will own and operate gasoline fueled cars with the same fuel economy as what North Americans drive today. This might be a flawed assumption.
In 2006, the analysts at Bernstein Global Wealth management put out a study that considered what impact the rapid take up of hybrid vehicles would have on the IEA's oil demand growth projections. They estimated that by 2030, more than 70% of the world's cars and light trucks would be hybrids with average fuel economy of about 62 miles per gallon. Based on this assumption, they concluded that the estimated demand for oil in 2030 attributable to cars and small trucks would be 50% lower than what the IEA was projecting.
http://community.investopedia.com/ne...D-TXN0122.aspx
Now that crude oil prices are down around $40 per barrel, the once widely quoted theory of "peak oil" appears to has been replaced by a new theory known as "peak demand".
This new theory contends that demand in the industrialized nations that make up the Organization for Economic Co-operation and Development (OECD), which has been eroding dramatically as a result of the recession, may have permanently peaked back in 2007.
Moreover, the theory also proposes that total global demand, including that of the energy hungry emerging markets, could also hit an upper limit as governments grow increasingly serious about implementing meaningful climate change policies.
One such policy could be promoting the greater use of hybrid or all-electric vehicles. An example of this is the stated goal of the new Obama administration to have one million plug-in hybrid cars on the road by 2015 that can get up to 150 miles per gallon. If this and similar initiatives around the world are successful, current projections for oil demand growth will have to be drastically revised.
According to the numbers laid out by the U.S. Energy Information Agency (EIA), global oil demand is projected to increase by about 35% between now and 2030, largely due to emerging market demand. About 74% of that increase is expected to be from transportation sector demand. The key assumption behind this forecast is that populations in India and China will own and operate gasoline fueled cars with the same fuel economy as what North Americans drive today. This might be a flawed assumption.
In 2006, the analysts at Bernstein Global Wealth management put out a study that considered what impact the rapid take up of hybrid vehicles would have on the IEA's oil demand growth projections. They estimated that by 2030, more than 70% of the world's cars and light trucks would be hybrids with average fuel economy of about 62 miles per gallon. Based on this assumption, they concluded that the estimated demand for oil in 2030 attributable to cars and small trucks would be 50% lower than what the IEA was projecting.
http://community.investopedia.com/ne...D-TXN0122.aspx
03-01-2009, 07:46 AM
#187
I feel the need...
Thread Starter
Scraping Bottom
Once considered too expensive, as well as too damaging to the land, exploitation of Alberta's oil sands is now a gamble worth billions.
http://ngm.nationalgeographic.com/20...ds/kunzig-text
One day in 1963, when Jim Boucher was seven, he was out working the trap line with his grandfather a few miles south of the Fort McKay First Nation reserve on the Athabasca River in northern Alberta. The country there is wet, rolling fen, dotted with lakes, dissected by streams, and draped in a cover of skinny, stunted trees—it's part of the boreal forest that sweeps right across Canada, covering more than a third of the country. In 1963 that forest was still mostly untouched. The government had not yet built a gravel road into Fort McKay; you got there by boat or in the winter by dogsled. The Chipewyan and Cree Indians there—Boucher is a Chipewyan—were largely cut off from the outside world. For food they hunted moose and bison; they fished the Athabasca for walleye and whitefish; they gathered cranberries and blueberries. For income they trapped beaver and mink. Fort McKay was a small fur trading post. It had no gas, electricity, telephone, or running water. Those didn't come until the 1970s and 1980s.....
03-04-2009, 12:30 AM
#188
Moderator Alumnus
Supertankers that once raced around the world to satisfy an unquenchable thirst for oil are now parked offshore, fully loaded, anchors down, their crews killing time. In the United States, vast storage farms for oil are almost out of room.
As demand for crude has plummeted, the world suddenly finds itself awash in oil that has nowhere to go.
It’s been less than a year since oil prices hit record highs. But now producers and traders are struggling with the new reality: The world wants less oil, not more. And turning off the spigot is about as easy as turning around one of those tankers.
So oil companies and investors are stashing crude, waiting for demand to rise and the bear market to end so they can turn a profit later.
Meanwhile, oil-producing countries such as Iran have pumped millions of barrels of their own crude into idle tankers, effectively taking crude off the market to halt declining prices that are devastating their economies.
Traders have always played a game of store and sell, bringing oil to market when it can fetch the best price. They say this time is different because of how fast the bottom fell out of the oil market.
“Nobody expected this,” said Antoine Halff, an analyst with Newedge. “The majority of people out there thought the market would keep rising to $200, even $250, a barrel. They were tripping over each other to pick a higher forecast.”
Now the strategy is storage. Anyone who can buy cheap oil and store it might be able to sell it at a premium later, when the global economy ramps up again.
The oil tanks that surround Cushing, Okla., in a sprawling network that holds 10 percent of the nation’s oil, have been swelling for months. Exactly how close they are to full is a closely guarded secret, but analysts who cover the industry say Cushing is approaching capacity.
http://www.msnbc.msn.com/id/29495753/
As demand for crude has plummeted, the world suddenly finds itself awash in oil that has nowhere to go.
It’s been less than a year since oil prices hit record highs. But now producers and traders are struggling with the new reality: The world wants less oil, not more. And turning off the spigot is about as easy as turning around one of those tankers.
So oil companies and investors are stashing crude, waiting for demand to rise and the bear market to end so they can turn a profit later.
Meanwhile, oil-producing countries such as Iran have pumped millions of barrels of their own crude into idle tankers, effectively taking crude off the market to halt declining prices that are devastating their economies.
Traders have always played a game of store and sell, bringing oil to market when it can fetch the best price. They say this time is different because of how fast the bottom fell out of the oil market.
“Nobody expected this,” said Antoine Halff, an analyst with Newedge. “The majority of people out there thought the market would keep rising to $200, even $250, a barrel. They were tripping over each other to pick a higher forecast.”
Now the strategy is storage. Anyone who can buy cheap oil and store it might be able to sell it at a premium later, when the global economy ramps up again.
The oil tanks that surround Cushing, Okla., in a sprawling network that holds 10 percent of the nation’s oil, have been swelling for months. Exactly how close they are to full is a closely guarded secret, but analysts who cover the industry say Cushing is approaching capacity.
http://www.msnbc.msn.com/id/29495753/
03-14-2009, 07:26 PM
#189
Moderator Alumnus
Here we go again...The great American drilling boom is over.
The number of oil and gas rigs deployed to tap new energy supplies across the country has plunged to less than 1,200 from 2,400 last summer, and energy executives say the drop is accelerating further.
Lower prices are bringing to an end an ambitious effort to squeeze more oil from aging fields and to tap new sources of natural gas. For the last four years, companies here drilled below airports, golf courses, churches and playgrounds in a frantic search for energy. They scoured the Rocky Mountains, the Great Plains, the Gulf of Mexico and Appalachia.
But the economic downturn has cut into demand. Global oil prices and American natural gas prices have plummeted two-thirds since last summer. Not even an unseasonably cold winter drove down unusually high inventories of natural gas.
The drop has been good news for American consumers, with gasoline now selling for $1.92 a gallon, on average, down from a high of $4.11 in July. But the result for companies is that it is becoming unprofitable to drill.
The reversal of fortune could have important implications for the future health of the nation’s energy companies, for consumer wallets and for national aspirations to rely less on foreign energy sources.
The drilling cutback has been particularly stark for natural gas. Gas exploration had soared in recent years after technology advances enabled the exploitation of gas trapped in huge shale beds found around Fort Worth, western Pennsylvania, upstate New York and elsewhere.
But that boom has created such abundant supplies that companies are not only drilling less but also deciding not to pump from wells already drilled.
Thousands of oil and gas workers who migrated around the country to work in new fields for fat salaries have been laid off.
“The big bonanza is over,” said Jay Ewing, the completion and construction manager for Devon Energy in the Barnett Shale field here, where so far this year his company has brought its rig count from 35 to 8. “Everyone is really shocked how fast everything has turned.”
Energy experts and company executives warn that oil and gas companies now cutting back on investments will be unable to respond quickly to a future economic recovery. John Richels, Devon’s president, said that if the slump lasted two years, it could then take 18 to 24 months for companies to reassemble rig crews.
That means a glut could rapidly turn to scarcity, sending energy prices soaring again. Already, experts are predicting that lower domestic gas production by the end of the year will require increased imports of liquefied natural gas from places like Qatar.
Through most of this year, gas supplies are not likely to decline sharply because so many shale wells came on line recently. But those wells should start to decline in productivity by next year, potentially leading to tight gas supplies if industrial and residential use picks up significantly in the second half of 2010.
“Inevitably, the market doesn’t react; it overreacts and shoots itself in the foot,” said Adam J. Robinson, director of commodities at Armored Wolf, a California hedge fund.
Domestic oil production is expected to increase this year over last, for the first time since 1991, according to projections by the Energy Department. That swing is attributable in part to increased production in the Gulf of Mexico from two giant new platforms that were years in the making. But some potential onshore production is likely to go untapped, as companies cut back on new drilling and abandon expensive efforts to flush extra oil from aging fields.
http://www.nytimes.com/2009/03/15/bu...5drilling.html
03-17-2009, 06:54 PM
#190
I feel the need...
Thread Starter
was born to walk alone... 
03-21-2009, 05:08 PM
#191
Moderator Alumnus
The decline in crude oil prices gets all the headlines, but the first globalized natural gas glut in history is driving an even more drastic collapse in the cost of the gas, which cooks food, heats homes and runs factories around the globe.
Six giant plants capable of cooling and liquefying natural gas for export are due to come on line this year, just as the economies of the Asian and European countries that import the most natural gas to run their industries are slowing.
Energy experts and company executives say that means that loads of natural gas from Qatar, Egypt, Nigeria and Algeria that otherwise would be going to Japan, South Korea, Taiwan and Spain are beginning to arrive in supertankers in the United States, even though there is a natural gas glut there, too.
With industrial and utility use of natural gas declining, prices in places like the United States have already declined by two-thirds since the summer. Prices are not likely to go down much more, experts say, but an increase in imports is likely to keep them low until the global economy recovers and drives demand back up.
That is good news for consumers around the world and many businesses, since natural gas provides about a fifth of the power generated by electric utilities and is a vital component for fertilizers, plastics and other industrial products. Many analysts say that it will act as a major stimulus for the global economy. But it is bad news for proponents of energy independence, who cheered the boom in natural gas drilling and production over the past four years.
Natural gas is becoming a world commodity like oil. It is still loosely connected to world oil benchmark prices, and its price, usually set by longer-term contracts everywhere except for the United States and Britain, can diverge widely from one continent to another. Until the last few years, liquefied natural gas was a high-priced necessity for countries that did not produce their own natural gas supplies or have access to piped reserves; but it now has become a cheap economic driver for countries like Japan with few energy resources.
---
The E.U. is considering various short-term solutions to bolster natural gas reserves and to make it easier for member states to pump gas among the bloc's 27 member states. The European Commission also wants increased investment in import terminals for L.N.G.
The E.U. now gets just 11 percent of its natural gas in liquefied form, but around 30 plants are planned or under construction around Europe, more than doubling the existing number. Proposed terminals in Croatia, on the island of Krk, and in Poland, at the port of Swinoujscie, are scheduled to begin operating by 2014 to diversify supplies to East European countries, which on average get 87 percent of their natural gas imports from Russia.
But as more terminals have been built, the amount of natural gas that is shipped from one continent to another in giant tankers has climbed. And now the emergence of the global market in natural gas is about to take a giant leap.
The global capacity for liquefied natural gas exports of 200 million tons a year will increase by 25 percent with the completion of six new plants in Qatar, Russia, Indonesia and Yemen, totaling $48 billion in investments, and the upgrading of a seventh plant in Malaysia. National energy companies in those countries, assisted by ExxonMobil, Total, BP and Shell, rushed construction of those projects in recent years to satisfy the mushrooming appetite for energy around the world. More large plants are due on line in 2010 and 2011.
http://www.iht.com/articles/2009/03/21/business/gas.php
Six giant plants capable of cooling and liquefying natural gas for export are due to come on line this year, just as the economies of the Asian and European countries that import the most natural gas to run their industries are slowing.
Energy experts and company executives say that means that loads of natural gas from Qatar, Egypt, Nigeria and Algeria that otherwise would be going to Japan, South Korea, Taiwan and Spain are beginning to arrive in supertankers in the United States, even though there is a natural gas glut there, too.
With industrial and utility use of natural gas declining, prices in places like the United States have already declined by two-thirds since the summer. Prices are not likely to go down much more, experts say, but an increase in imports is likely to keep them low until the global economy recovers and drives demand back up.
That is good news for consumers around the world and many businesses, since natural gas provides about a fifth of the power generated by electric utilities and is a vital component for fertilizers, plastics and other industrial products. Many analysts say that it will act as a major stimulus for the global economy. But it is bad news for proponents of energy independence, who cheered the boom in natural gas drilling and production over the past four years.
Natural gas is becoming a world commodity like oil. It is still loosely connected to world oil benchmark prices, and its price, usually set by longer-term contracts everywhere except for the United States and Britain, can diverge widely from one continent to another. Until the last few years, liquefied natural gas was a high-priced necessity for countries that did not produce their own natural gas supplies or have access to piped reserves; but it now has become a cheap economic driver for countries like Japan with few energy resources.
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The E.U. is considering various short-term solutions to bolster natural gas reserves and to make it easier for member states to pump gas among the bloc's 27 member states. The European Commission also wants increased investment in import terminals for L.N.G.
The E.U. now gets just 11 percent of its natural gas in liquefied form, but around 30 plants are planned or under construction around Europe, more than doubling the existing number. Proposed terminals in Croatia, on the island of Krk, and in Poland, at the port of Swinoujscie, are scheduled to begin operating by 2014 to diversify supplies to East European countries, which on average get 87 percent of their natural gas imports from Russia.
But as more terminals have been built, the amount of natural gas that is shipped from one continent to another in giant tankers has climbed. And now the emergence of the global market in natural gas is about to take a giant leap.
The global capacity for liquefied natural gas exports of 200 million tons a year will increase by 25 percent with the completion of six new plants in Qatar, Russia, Indonesia and Yemen, totaling $48 billion in investments, and the upgrading of a seventh plant in Malaysia. National energy companies in those countries, assisted by ExxonMobil, Total, BP and Shell, rushed construction of those projects in recent years to satisfy the mushrooming appetite for energy around the world. More large plants are due on line in 2010 and 2011.
http://www.iht.com/articles/2009/03/21/business/gas.php
03-31-2009, 06:55 PM
#192
I feel the need...
Thread Starter
Tupi Oil Imperiled as Price Drop Unravels Energy Plan
It was a Sunday morning in August 2006 when Gilberto Lima broke the bad news to Mario Carminatti, executive manager for exploration at Petroleo Brasileiro SA, Brazil’s state-controlled oil company. The company’s quarter- billion-dollar bet on a new offshore oil field was a bust.
Years earlier, Petrobras’s study of the geological formations beneath Brazilian territorial waters had indicated there was oil -- lots of it. So the company spent $240 million drilling a test hole in the seabed more than 300 kilometers off the coast of Rio de Janeiro state.
All the drillers found, said Lima, Petrobras’s general manager for exploration, was water, salt and rock.
“I told Gilberto, ‘That’s impossible,’” Carminatti recalls. “‘Tell them to look again.’ It was one of the worst days of my life.”
It turned out that the drilling crew had sunk the wrong probe through the test hole. When they took a new sounding, they changed their minds about the presence of oil.
They also changed Brazil.....
Years earlier, Petrobras’s study of the geological formations beneath Brazilian territorial waters had indicated there was oil -- lots of it. So the company spent $240 million drilling a test hole in the seabed more than 300 kilometers off the coast of Rio de Janeiro state.
All the drillers found, said Lima, Petrobras’s general manager for exploration, was water, salt and rock.
“I told Gilberto, ‘That’s impossible,’” Carminatti recalls. “‘Tell them to look again.’ It was one of the worst days of my life.”
It turned out that the drilling crew had sunk the wrong probe through the test hole. When they took a new sounding, they changed their minds about the presence of oil.
They also changed Brazil.....
06-11-2009, 06:45 PM
#193
I feel the need...
Thread Starter
The Crude Reality Of Peak Production
If crude oil can double in value with the world in recession, just imagine what will happen when demand picks up. Prepare yourself.
http://www.forbes.com/2009/06/10/cru...crude-oil.html
Conspiracy theorists want to blame the meteoric rise of oil from just above $30 a barrel last December to $71 this week on speculation by Goldman Sachs and a bunch of hedge funds. Others are sure that China's $600 billion stimulus program is to blame, while still more worrywarts point to Nigerian rebels blowing up pipelines in Africa.
Then you have the ideological fanatics like CNBC's Larry Kudlow, whose rah-rah mantra is "drill, drill, drill" as the antidote to the doubling of oil prices and the coming scourge of inflation. In other words, it's the damn absence of drilling that's driving crude prices higher and threatening the economy cum stock market.
Don't believe the barrage of short-term noisemakers. Some experts believe supply is running far ahead of demand--but this is an extremely short-sighted view that fluctuates fast and seems to be ending as oil and gasoline inventories begin to get tighter. Understand that the oil producers don't want prices to soften.....
Then you have the ideological fanatics like CNBC's Larry Kudlow, whose rah-rah mantra is "drill, drill, drill" as the antidote to the doubling of oil prices and the coming scourge of inflation. In other words, it's the damn absence of drilling that's driving crude prices higher and threatening the economy cum stock market.
Don't believe the barrage of short-term noisemakers. Some experts believe supply is running far ahead of demand--but this is an extremely short-sighted view that fluctuates fast and seems to be ending as oil and gasoline inventories begin to get tighter. Understand that the oil producers don't want prices to soften.....
06-12-2009, 12:06 AM
#194
trill recognize trill
how exactly are diesel prices affected by the price of crude oil because as of recently diesel is about 10-20 cents cheaper than gas now when it used to be the other way around a few weeks ago
06-13-2009, 08:56 PM
#195
Safety Car
yesterdays determination of Iran leaves us f'ed. not to mention the demand for fuel driven by uprising China. dont want to get into too much depth - but i am the type that believes that every facet of economic growth is favoring the chinese. oil prices will continue to rise until there is none left. there's is not much we could do about it. i am a realist - americans will not make a huge adaptation over the next 50 yrs to fully avoid oil dependency. and to add insult to injury, when oil starts to dry up, the price of drilling will skyrocket, further increasing the price of the barrel. when oil is depleted, i doubt the global economy will be entirely prepared to go to alternative energy across the board. sorry to be cynical - buts thats my outlook
06-13-2009, 09:11 PM
#196
Safety Car
on a further note, when we reach the point of oil depletion - major cities with public transport infrastructure will boom. middle america will suffer. and the RE demand in those cities will go through the roof. granted, this will not occur in our lifetime.
06-23-2009, 06:34 PM
#197
I feel the need...
Thread Starter
Oil at $200 Means Fewer Chinese Imports, More Jobs
If Jeff Rubin is right, traders can bet on oil prices gushing to $200 a barrel. Everyone else will see “the 18-wheeler of globalization” thrown into reverse.
This is more than idle prattle. Rubin is a former chief economist at Toronto investment bank CIBC World Markets Inc. He made a name for himself with his accurate predictions that oil prices would reach $50 a barrel in 2005 and $100 a barrel in 2007. In July, they topped $140 a barrel.
If you blamed the record prices on rogue traders and hedge funds, you were mistaken, he argues in his cogent book, “Why Your World Is About to Get a Whole Lot Smaller.” On a planet with shrinking supplies and expanding demand, there’s only one place prices can go, he says: up. The recession brought us no more than a breather.
“In the next cycle, the same imbalance will probably take us to $200 per barrel before another recession temporarily knocks back prices and demand,” he writes.
Rubin’s argument, compressed, goes like this: The global economy runs on oil -- from the gasoline that fuels commuter cars to the sludge called bunker fuel that propels container ships from China to California. When oil is cheap, low-wage countries have an edge. When crude hits triple digits, Western workers become competitive again. Before we know it, our food and clothes will come from fields and factories closer to home.....
This is more than idle prattle. Rubin is a former chief economist at Toronto investment bank CIBC World Markets Inc. He made a name for himself with his accurate predictions that oil prices would reach $50 a barrel in 2005 and $100 a barrel in 2007. In July, they topped $140 a barrel.
If you blamed the record prices on rogue traders and hedge funds, you were mistaken, he argues in his cogent book, “Why Your World Is About to Get a Whole Lot Smaller.” On a planet with shrinking supplies and expanding demand, there’s only one place prices can go, he says: up. The recession brought us no more than a breather.
“In the next cycle, the same imbalance will probably take us to $200 per barrel before another recession temporarily knocks back prices and demand,” he writes.
Rubin’s argument, compressed, goes like this: The global economy runs on oil -- from the gasoline that fuels commuter cars to the sludge called bunker fuel that propels container ships from China to California. When oil is cheap, low-wage countries have an edge. When crude hits triple digits, Western workers become competitive again. Before we know it, our food and clothes will come from fields and factories closer to home.....
07-14-2009, 04:46 PM
#198
Moderator Alumnus
Dozens of fruitful wells beneath the rich Bakken shale in North Dakota continue to fuel a hunch among oilmen and geologists that another vast crude-bearing formation may be buried in the state's vast oil patch.
Lynn Helms, director of the state Department of Mineral Resources, said recent production results from 103 newly tapped wells in the Three Forks-Sanish formation show many that are "as good or better" than some in the Bakken, which lies two miles under the surface in western North Dakota and holds billions of barrels of oil.
"I think it's a big deal and we're pretty fired up about it," Helms said.
---
State and industry officials are conducting a study to determine whether the Three Forks is a unique reservoir. The plan is to compare results from closely spaced wells, one aiming for the Three Forks, and the other at the Bakken. Researchers will look at pressure changes in the formations to determine if they are connected.
Results from the study could be ready later this year, officials say. It already is spurring some speculation that the state has billions of barrels more in oil reserves.
"Eventually it could equal the Bakken, which is remarkable, and that's an understatement," Helms said.
http://www.google.com/hostednews/ap/...vMQhgD99EC8L81
Lynn Helms, director of the state Department of Mineral Resources, said recent production results from 103 newly tapped wells in the Three Forks-Sanish formation show many that are "as good or better" than some in the Bakken, which lies two miles under the surface in western North Dakota and holds billions of barrels of oil.
"I think it's a big deal and we're pretty fired up about it," Helms said.
---
State and industry officials are conducting a study to determine whether the Three Forks is a unique reservoir. The plan is to compare results from closely spaced wells, one aiming for the Three Forks, and the other at the Bakken. Researchers will look at pressure changes in the formations to determine if they are connected.
Results from the study could be ready later this year, officials say. It already is spurring some speculation that the state has billions of barrels more in oil reserves.
"Eventually it could equal the Bakken, which is remarkable, and that's an understatement," Helms said.
http://www.google.com/hostednews/ap/...vMQhgD99EC8L81
08-25-2009, 05:42 PM
#199
Moderator Alumnus
Remeber “peak oil”? It’s the theory that geological scarcity will at some point make it impossible for global petroleum production to avoid falling, heralding the end of the oil age and, potentially, economic catastrophe. Well, just when we thought that the collapse in oil prices since last summer had put an end to such talk, along comes Fatih Birol, the top economist at the International Energy Agency, to insist that we’ll reach the peak moment in 10 years, a decade sooner than most previous predictions (although a few ardent pessimists believe the moment of no return has already come and gone).
Like many Malthusian beliefs, peak oil theory has been promoted by a motivated group of scientists and laymen who base their conclusions on poor analyses of data and misinterpretations of technical material. But because the news media and prominent figures like James Schlesinger, a former secretary of energy, and the oilman T. Boone Pickens have taken peak oil seriously, the public is understandably alarmed.
A careful examination of the facts shows that most arguments about peak oil are based on anecdotal information, vague references and ignorance of how the oil industry goes about finding fields and extracting petroleum. And this has been demonstrated over and over again: the founder of the Association for the Study of Peak Oil first claimed in 1989 that the peak had already been reached, and Mr. Schlesinger argued a decade earlier that production was unlikely to ever go much higher.
Mr. Birol isn’t the only one still worrying. One leading proponent of peak oil, the writer Paul Roberts, recently expressed shock to discover that the liquid coming out of the Ghawar Field in Saudi Arabia, the world’s largest known deposit, is around 35 percent water and rising. But this is hardly a concern — the buildup is caused by the Saudis pumping seawater into the field to keep pressure up and make extraction easier. The global average for water in oil field yields is estimated to be as high as 75 percent.
Another critic, a prominent consultant and investor named Matthew Simmons, has raised concerns over oil engineers using “fuzzy logic” to estimate reservoir holdings. But fuzzy logic is a programming method that has been used since I was in graduate school in situations where the factors are hazy and variable — everything from physical science to international relations — and its track record in oil geology has been quite good.
But those are just the latest arguments — for the most part the peak-oil crowd rests its case on three major claims: that the world is discovering only one barrel for every three or four produced; that political instability in oil-producing countries puts us at an unprecedented risk of having the spigots turned off; and that we have already used half of the two trillion barrels of oil that the earth contained.
Let’s take the rate-of-discovery argument first: it is a statement that reflects ignorance of industry terminology. When a new field is found, it is given a size estimate that indicates how much is thought to be recoverable at that point in time. But as years pass, the estimate is almost always revised upward, either because more pockets of oil are found in the field or because new technology makes it possible to extract oil that was previously unreachable. Yet because petroleum geologists don’t report that additional recoverable oil as “newly discovered,” the peak oil advocates tend to ignore it. In truth, the combination of new discoveries and revisions to size estimates of older fields has been keeping pace with production for many years.
A related argument — that the “easy oil” is gone and that extraction can only become more difficult and cost-ineffective — should be recognized as vague and irrelevant. Drillers in Persia a century ago certainly didn’t consider their work easy, and the mechanized, computerized industry of today is a far sight from 19th-century mule-drawn rigs. Hundreds of fields that produce “easy oil” today were once thought technologically unreachable.
The latest acorn in the discovery debate is a recent increase in the overall estimated rate at which production is declining in large oil fields. This is assumed to be the result of the “superstraw” technologies that have become dominant over the past decade, which can drain fields faster than ever. True, because quicker extraction causes the fluid pressure in the field to drop rapidly, the wells become less and less productive over time. But this declining return on individual wells doesn’t necessarily mean that whole fields are being cleaned out. As the Saudis have proved in recent years at Ghawar, additional investment — to find new deposits and drill new wells — can keep a field’s overall production from falling.
When their shaky claims on geology are exposed, the peak-oil advocates tend to argue that today’s geopolitical instability needs to be taken into consideration. But political risk is hardly new: a leading Communist labor organizer in the Baku oil industry in the early 1900s would later be known to the world as Josef Stalin.
When the large supply disruptions of 1973 and 1979 led to skyrocketing prices, nearly all oil experts said the underlying cause was resource scarcity and that prices would go ever higher in the future. The oil companies diversified their investments — Mobil even started buying up department stores! — and President Jimmy Carter pushed for the development of synthetic fuels like shale oil, arguing that markets were too myopic to realize the imminent need for substitutes. All sorts of policy wonks, energy consultants and Nobel-prize-winning economists jumped on the bandwagon to explain that prices would only go up — even though they had never done so historically. Prices instead proceeded to slide for two decades, rather as the tide ignored King Canute.
Just as, in the 1970s, it was the Arab oil embargo and the Iranian Revolution, today it is the invasion of Iraq and instability in Venezuela and Nigeria. But the solution, as ever, is for the industry to shift investment into new regions, and that’s what it is doing. Yet peak-oil advocates take advantage of the inevitable delay in bringing this new production on line to claim that global production is on an irreversible decline.
In the end, perhaps the most misleading claim of the peak-oil advocates is that the earth was endowed with only 2 trillion barrels of “recoverable” oil. Actually, the consensus among geologists is that there are some 10 trillion barrels out there. A century ago, only 10 percent of it was considered recoverable, but improvements in technology should allow us to recover some 35 percent — another 2.5 trillion barrels — in an economically viable way. And this doesn’t even include such potential sources as tar sands, which in time we may be able to efficiently tap.
Oil remains abundant, and the price will likely come down closer to the historical level of $30 a barrel as new supplies come forward in the deep waters off West Africa and Latin America, in East Africa, and perhaps in the Bakken oil shale fields of Montana and North Dakota. But that may not keep the Chicken Littles from convincing policymakers in Washington and elsewhere that oil, being finite, must increase in price. (That’s the logic that led the Carter administration to create the Synthetic Fuels Corporation, a $3 billion boondoggle that never produced a gallon of useable fuel.)
This is not to say that we shouldn’t keep looking for other cost-effective, low-pollution energy sources — why not broaden our options? But we can’t let the false threat of disappearing oil lead the government to throw money away on harebrained renewable energy schemes or impose unnecessary and expensive conservation measures on a public already struggling through tough economic times.
http://www.nytimes.com/2009/08/25/opinion/25lynch.html
Like many Malthusian beliefs, peak oil theory has been promoted by a motivated group of scientists and laymen who base their conclusions on poor analyses of data and misinterpretations of technical material. But because the news media and prominent figures like James Schlesinger, a former secretary of energy, and the oilman T. Boone Pickens have taken peak oil seriously, the public is understandably alarmed.
A careful examination of the facts shows that most arguments about peak oil are based on anecdotal information, vague references and ignorance of how the oil industry goes about finding fields and extracting petroleum. And this has been demonstrated over and over again: the founder of the Association for the Study of Peak Oil first claimed in 1989 that the peak had already been reached, and Mr. Schlesinger argued a decade earlier that production was unlikely to ever go much higher.
Mr. Birol isn’t the only one still worrying. One leading proponent of peak oil, the writer Paul Roberts, recently expressed shock to discover that the liquid coming out of the Ghawar Field in Saudi Arabia, the world’s largest known deposit, is around 35 percent water and rising. But this is hardly a concern — the buildup is caused by the Saudis pumping seawater into the field to keep pressure up and make extraction easier. The global average for water in oil field yields is estimated to be as high as 75 percent.
Another critic, a prominent consultant and investor named Matthew Simmons, has raised concerns over oil engineers using “fuzzy logic” to estimate reservoir holdings. But fuzzy logic is a programming method that has been used since I was in graduate school in situations where the factors are hazy and variable — everything from physical science to international relations — and its track record in oil geology has been quite good.
But those are just the latest arguments — for the most part the peak-oil crowd rests its case on three major claims: that the world is discovering only one barrel for every three or four produced; that political instability in oil-producing countries puts us at an unprecedented risk of having the spigots turned off; and that we have already used half of the two trillion barrels of oil that the earth contained.
Let’s take the rate-of-discovery argument first: it is a statement that reflects ignorance of industry terminology. When a new field is found, it is given a size estimate that indicates how much is thought to be recoverable at that point in time. But as years pass, the estimate is almost always revised upward, either because more pockets of oil are found in the field or because new technology makes it possible to extract oil that was previously unreachable. Yet because petroleum geologists don’t report that additional recoverable oil as “newly discovered,” the peak oil advocates tend to ignore it. In truth, the combination of new discoveries and revisions to size estimates of older fields has been keeping pace with production for many years.
A related argument — that the “easy oil” is gone and that extraction can only become more difficult and cost-ineffective — should be recognized as vague and irrelevant. Drillers in Persia a century ago certainly didn’t consider their work easy, and the mechanized, computerized industry of today is a far sight from 19th-century mule-drawn rigs. Hundreds of fields that produce “easy oil” today were once thought technologically unreachable.
The latest acorn in the discovery debate is a recent increase in the overall estimated rate at which production is declining in large oil fields. This is assumed to be the result of the “superstraw” technologies that have become dominant over the past decade, which can drain fields faster than ever. True, because quicker extraction causes the fluid pressure in the field to drop rapidly, the wells become less and less productive over time. But this declining return on individual wells doesn’t necessarily mean that whole fields are being cleaned out. As the Saudis have proved in recent years at Ghawar, additional investment — to find new deposits and drill new wells — can keep a field’s overall production from falling.
When their shaky claims on geology are exposed, the peak-oil advocates tend to argue that today’s geopolitical instability needs to be taken into consideration. But political risk is hardly new: a leading Communist labor organizer in the Baku oil industry in the early 1900s would later be known to the world as Josef Stalin.
When the large supply disruptions of 1973 and 1979 led to skyrocketing prices, nearly all oil experts said the underlying cause was resource scarcity and that prices would go ever higher in the future. The oil companies diversified their investments — Mobil even started buying up department stores! — and President Jimmy Carter pushed for the development of synthetic fuels like shale oil, arguing that markets were too myopic to realize the imminent need for substitutes. All sorts of policy wonks, energy consultants and Nobel-prize-winning economists jumped on the bandwagon to explain that prices would only go up — even though they had never done so historically. Prices instead proceeded to slide for two decades, rather as the tide ignored King Canute.
Just as, in the 1970s, it was the Arab oil embargo and the Iranian Revolution, today it is the invasion of Iraq and instability in Venezuela and Nigeria. But the solution, as ever, is for the industry to shift investment into new regions, and that’s what it is doing. Yet peak-oil advocates take advantage of the inevitable delay in bringing this new production on line to claim that global production is on an irreversible decline.
In the end, perhaps the most misleading claim of the peak-oil advocates is that the earth was endowed with only 2 trillion barrels of “recoverable” oil. Actually, the consensus among geologists is that there are some 10 trillion barrels out there. A century ago, only 10 percent of it was considered recoverable, but improvements in technology should allow us to recover some 35 percent — another 2.5 trillion barrels — in an economically viable way. And this doesn’t even include such potential sources as tar sands, which in time we may be able to efficiently tap.
Oil remains abundant, and the price will likely come down closer to the historical level of $30 a barrel as new supplies come forward in the deep waters off West Africa and Latin America, in East Africa, and perhaps in the Bakken oil shale fields of Montana and North Dakota. But that may not keep the Chicken Littles from convincing policymakers in Washington and elsewhere that oil, being finite, must increase in price. (That’s the logic that led the Carter administration to create the Synthetic Fuels Corporation, a $3 billion boondoggle that never produced a gallon of useable fuel.)
This is not to say that we shouldn’t keep looking for other cost-effective, low-pollution energy sources — why not broaden our options? But we can’t let the false threat of disappearing oil lead the government to throw money away on harebrained renewable energy schemes or impose unnecessary and expensive conservation measures on a public already struggling through tough economic times.
http://www.nytimes.com/2009/08/25/opinion/25lynch.html
09-22-2009, 07:20 PM
#200
I feel the need...
Thread Starter
Former Pariah Qaddafi’s U.S. Trip Seals Courtship of Libyan Oil
The families of Americans killed in the bombing of a jetliner over Lockerbie, Scotland, in 1988 will protest Libyan leader Muammar Qaddafi’s visit to New York this week. His United Nations counterparts may be more welcoming.
Qaddafi, who speaks at the UN tomorrow, has cemented ties with countries that shunned him for three decades and are now lured by Africa’s biggest oil reserves and a 150 billion-dinar ($123 billion), five-year government infrastructure-investment plan.
“With fewer and fewer sizable oil patches left, oil companies have incentives to acquire acreage wherever they can,” said Geoff Porter, the chief Africa and Middle East analyst for the Eurasia Group, a New York-based firm that analyzes political risks. For oil companies, doing business with a former pariah state “is worth it,” he said.....
Qaddafi, who speaks at the UN tomorrow, has cemented ties with countries that shunned him for three decades and are now lured by Africa’s biggest oil reserves and a 150 billion-dinar ($123 billion), five-year government infrastructure-investment plan.
“With fewer and fewer sizable oil patches left, oil companies have incentives to acquire acreage wherever they can,” said Geoff Porter, the chief Africa and Middle East analyst for the Eurasia Group, a New York-based firm that analyzes political risks. For oil companies, doing business with a former pariah state “is worth it,” he said.....