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Grangemouth strike to close pipeline at cost of £50m a day
Terry Macalister, The Guardian,
The oil and gas industry warned last night that a strike by workers at the Grangemouth refinery in Scotland could force the shutdown of half of Britain's North Sea output, at a cost of £50m a day.
The government insisted supplies were secure but the price of diesel rose 10% amid panic buying of fuel by motorists. Global crude values have already been hit by fears that the breakdown of talks over workers' pensions at the Ineos-owned refinery would result in a two-day strike starting this Sunday.
(25 April 2008)
And at The Oil Drum: Grangemouth: on the brink....
Russia's Oil Production is About to Peak
Khebab, The Oil Drum
Since 2005, the Russian oil industry has been in constant turmoil. Production growth has also slow down significantly maybe as a result. The Exxon Sakhalin-I project has now reached its peak and production is experiencing a steep decline since. On the upside, many projects are expected to come online and the IEA forecasts that oil production in Russia will increase by 90,000 bbl/d in 2008 and 300,000 bbl/d in 2009, following growth of 200,000 bbl/d in 2007.
... because fields online prior to 2005 won't go into decline immediately (see this post for an detailed analysis), the decline rate is set to increase linearly from 0 to 4% between 2004 and 2011. Current production seems to be well within the Monte-Carlo uncertainty interval and at best, a production plateau is seen in the near future.
(24 April 2008)
There's more to $120 oil than speculation
Loren Steffy, Houston Chronicle
... "All the conventional wisdom about oil markets is wrong," said Jeffrey Brown, an independent geologist in Dallas who studies energy market data.
The idea that high oil prices are temporary is misleading, he added.
Don't let the pause in prices Thursday fool you. Brown sees a geometric progression of escalating prices, an upward spiral of devastating economic consequences.
Brown is a proponent of peak oil, the theory that the world's oil supplies are declining. I called him, though, not to retread those arguments but because of his work developing the Export Land Model, a counterintuitive theory that says as oil prices rise, exports from oil-producing nations will fall.
Guess what that means for importers such as the U.S.?
Here's what happens: as prices rise, oil-exporting countries benefit from an influx of petrodollars. That, in turn, spurs economic expansion, which in turn increases domestic oil consumption. As demand rises, more oil is devoted to meeting that domestic demand, leaving less oil to export.
As exports fall, worldwide prices rise even more.
What Brown finds scarier than $120 oil is the latest projections from the International Energy Agency that forecast a 4.4 percent rise in oil consumption this year from key emerging markets - China, India, Russia and the Middle East.
(24 April 2008)
Jeffrey Brown is an Energy Bulletin contributor. He writes:
For more on the Export Land Model, see A quantitative assessment of future net oil exports by the top five net oil exporters
IMO, it is imperative that we start working on Alan Drake's plan, what we used to have--electrified streetcars and light rail. From 1908 to 1948, North Texas, like many areas, had an electric Interurban system connecting several urban areas, which was torn up, in favor of the automobile. I've used the "Sixth Sense" analogy (in the movie, many dead people don't know they are dead, and they only see what they want to see). For most of us, our auto-centric suburban way of life is dead, but we only see what we want to see.
Alan Drake may be wrong, but at least he has a plan using proven technology that involves minimal use of oil, and which can be powered with alternative energy, such as windpower: Electrification of Transportation
'Age of scarcity' will drive oil to $225 US a barrel: CIBC
John Morrissy, Canwest News Service
Prepare for gasoline prices to hit $2.25 a litre by 2012 and for crude oil to soar to $225 US a barrel as scant supply growth delivers us into the "age of scarcity," says CIBC World Markets chief economist Jeff Rubin.
"Our latest review of probable supply suggests oil production will hardly grow at all, with average daily production between now and 2012 rising by barely more than a million barrels per day, Rubin said in his report, The Age of Scarcity. "Despite the recent record jump in oil prices, the outlook suggests oil prices will continue to rise steadily over the next five years, almost doubling from current levels."
He said there has been no growth in oil supply over the past two and half years, contrary to popular misconception.
(24 April 2008)
Related at Globe & Mail: Oil bull ups ante to $200 by 2012
Contributor Bryan Swansburg writes:
Another MSM appearance by Jeff Rubin. Is he really an economist?
UPDATE (Apr 25)
Contributor Dr. Larry Hughes writes:
The most recent report from Jeff Rubin at CIBC World Markets. It has much of Canada buzzing. I took a cab home last night and the driver started quoting chapter and verse from Rubin's projections of $12CDN per gallon ($3CDN per litre) by 2012. Today's Report on Business [Globe and Mail] has also included a commentary on this report.
You can tell that the high price is hitting home, because members of the opposition in Nova Scotia's provincial legislature are calling on the Premier of the province to reduce the gasoline tax. What people fail to understand is that you can't subsidize shortages.
UPDATE (Apr 25)
The CIBC report mentioned above is available online as a PDF: The Age of Scarcity