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Peak at the polls
David Strahan, The Last Oil Shock
Peak oil has come a long way in the last few years: from bug-eyed millennial cult to mainstream consensus, embracing academia, much of the oil industry, and now the US military. There’s a growing consensus global oil production will peak this side of 2020, with many forecasts clustered around the middle the decade and some well within the next parliament. Strange then that even now the mainstream parties’ manifestos contain not a single word on the subject...
(22 April 2010)
Saudi Arabia global oil exports to wane post-2010
Lianna Brinded, energy risk
Saudi Arabia’s long-standing status as a swing producer of crude oil could be drawing to a close according to the head of national oil company Saudi Aramco.
Global oil exports from Saudi Arabia, the world's largest oil producer alongside Russia, will start to wane in the coming years as domestic demand surges and spare capacity drops, warned Khalid al-Falih, chief executive officer of Saudi Aramco in a speech published on the company's website.
Domestic energy demand is expected to increase by almost 250%, from about 3.4 million barrels per day (b/d) in 2009 to about 8.3 million b/d by 2028, which will eventually affect the country's ability to export oil, he said.
"Along with China and India, we do expect Saudi Arabia to be one of the largest sources of global oil demand," says Amrita Sen, oil analyst at Barclays Capital. "And given Saudi's importance in the oil market as the swing producer, in the longer term, this can impact their ability to control the market at the margin. However, this is unlikely to have a significant impact this year, given the substantial spare capacity it is sitting on, though that buffer could get eroded sooner rather than later in the coming few years."
Saudi Arabia maintains the world's largest crude oil production capacity, estimated by the US Energy Information Administration (EIA) to be around 11 million b/d, as of mid-year 2009. The country contains approximately 264 billion barrels of proven oil reserves, including 2.5 billion barrels in the Saudi Kuwaiti shared Neutral Zone, amounting to around one-fifth of proven, conventional world oil reserves, says the Oil and Gas Journal....
(22 April 2010)
Drilling and spilling for all the oil that's left
Jeff Rubin, Globe and Mail
America’s dream of greater energy independence is rapidly turning into an ecological nightmare. Instead of filling empty gas tanks, BP’s Deepwater Horizon well miles offshore is oozing thousands of barrels a day of oil, already covering an area over 1,900 square miles in the food-rich waters of the Gulf of Mexico. With no way of shutting off the valve, which is now buried 1,900 metres below the sea, a $2-billion seafood industry is threatened, not to mention the billions more in damage to coastal real estate values and the potential devastation to wetlands and the wildlife they contain if the growing slick washes ashore.
Most forms of unconventional oil and gas (including, by the way, shale gas) are invariably very hard on the environment. Although tar sands production draws most of the world’s criticism, we are quickly discovering that deep-water wells and the pressure surges they engender run the risk of wreaking even greater ecological and environmental devastation.
And the deeper that technology allows us to drill miles below the ocean floor, the greater the risk that we will see more and more of these disasters. If this week has shown us the pressure surge of wells a mile below the ocean floor, what are the prospects of our standing up to those we’ll encounter in newly discovered Gulf of Mexico fields like BP’s Tiber one, six miles below the ocean floor?
(28 April 2010)
Gulf oil spill 'five times' larger than estimated
Adam Gabbatt and agencies, The Guardian
Five times more oil a day than previously believed is spewing into the Gulf of Mexico from the blown-out well of the Deepwater Horizon drilling rig, the US coastguard has said.
Coastguard Rear Admiral Mary Landry said National Oceanic Atmospheric Administration (NOAA) experts now estimate that 5,000 barrels a day of oil are spilling into the gulf – far more than the previous estimate of 1,000 barrels a day. Robot submarines have so far failed to shut off the flow, 1,500m (5,000ft) below the surface, but the coastguard said a test burn on an isolated area of the spill was successful.
The revision came after a new leak was discovered and strong winds were forecast which NOAA said would push the oil towards the US shoreline.
However Doug Suttle, chief operating officer for BP, disputed the new estimates yesterday, pointing to a diagram that plotted the leaks and saying he did not believe the amount of oil spilling into the water was higher than earlier approximations.
Landry stuck to the NOAA estimate and said it was based on aerial surveys, study of the trajectory of the oil slick and other factors.
Landry added that the US president, Barack Obama, had been briefed on the revised estimate, and said the government had offered to have the defence department help contain the spill and protect the US shoreline and wildlife...
(29 April 2010)
Flight disruptions in Europe a Foretaste for Period of Oil Decline
Matt Mushalik, Crude Oil Peak
The shut down of European air traffic as a result of the ash cloud from Iceland’s volcano demonstrates how ill-prepared we are for the period of declining oil production ahead of us.
The Frankfurt daily FAZ describes following impacts in an article entitled “Is there a way without flying?”
Ministers take night trains to meetings
People stay home
CEOs cancel conferences
Letters take longer
Supplies disrupted: tropical fruits; T shorts from China, Laos, Cambodia; computer chips from Taiwan, orchids from Thailand, fish from Japan, books ordered by internet
Hire car business is booming but geographical distribution of fleet is out of balance as cars are not returned to base as usual
Taxis at airports and air port shops have less business; 70,000 employees at Frankfurt Airport are affected
Tax revenue for city council is reduced – the airport is the 2nd most important source of tax after banks
Less visitors for trade fairs
No more short weekend trips to Mallorca
Video conferencing is now so advanced, even confidential talks can be done
Quiet approach corridors for residents and clearer skies
While a volcano eruption is “an act of God”, peak oil is not. There is enough statistical, financial and economic evidence – presented on this web site – that the global crude oil peak started in 2005. But governments are either still too blind to see it or are in denial mode...
The Imminent Crash Of Oil Supply: Be Afraid
Nicholas C. Arguimbau, Countercurrents
What is going to happen and how it came to pass that we weren't forewarnded
Look at this graph and be afraid. It does not come from Earth First. It does not come from the Sierra Club. It was not drawn by Socialists or Nazis or Osama Bin Laden or anyone from Goldman-Sachs. If you are a Republican Tea-Partier, rest assured it does not come from a progressive Democrat. And vice versa. It was drawn by the United States Department of Energy, and the United States military's Joint Forces Command concurs with the overall picture.
What does it imply? The supply of the world's most essential energy source is going off a cliff. Not in the distant future,but in a year and a half. Production of all liquid fuels, including oil, will drop within 20 years to half what it is today. And the difference needs to be made up with "unidentified projects," which one of the world's leading petroleum geologists says is just a "euphemism for rank shortage," and the world's foremost oil industry banker says is "faith based."
The author, Nicholas C. Arguimbau, is an appellate and environmental lawyer licensed in California and residing in Western Massachusetts
(23 April 2010)
Peak oil predictions
John Sauven, Guardian
The peak oil debate has always been about reserves and costs. But it's clean, green technologies that now spell oil's demise
It's now a truism – among oil companies, and governments alike – that even in an age when we risk catastrophic climate change, and its attendant catastrophes such as we've seen in the Gulf of Mexico this week, oil exploration is an inevitable part of our future. It may be a truism, but is it true?
As former Shell CEO Jeroen van der Veer has said several times, the era of "easy oil" is over. This means that the bulk of the oil that is left to exploit is to be found in the tar sands and in ultra-deep water and other marginal resources, such as the Arctic. All of these resources are very expensive to produce, require long lead-in times to bring on-stream and, in many cases, have controversial environmental and social impacts that will cost more to ameliorate.
Even without addressing the social and environmental costs, the break-even point for these kinds of oil projects is close to the ceiling at which oil prices could be sustained by the global economy. At between $65 and $90 a barrel, the room for long-term profitability appears slender. With the global economy remaining in a fragile state and oil prices rallying, it's important to ask whether the economy can withstand further price increases, not to mention whether the climate can sustain further growth in carbon emissions.
Will the expense of bringing this oil to market mean that the sustained oil prices needed to produce the oil will also consistently drive the global economy back into recession?
At the launch of BP's most recent Statistical Review of World Energy in early June 2009, BP's chief executive, Tony Hayward, said that as the oil price went over $90, consumers "began to change their behaviour" and that there was significant "elasticity of demand above $100 a barrel". In other words, if it costs too much, we can't – and won't – buy it...
(23 April 2010)