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Peak cheap oil is an incontrovertible fact
Ambrose Evans-Pritchard, The Daily Telegraph
Brent crude jumped to $115 a barrel last week. Petrol costs in Germany and across much of Europe are now at record levels in local currencies.
Diesel is above the political pain threshold of $4 a gallon in the US, hence reports circulating last week that the International Energy Agency (IEA) is preparing to release strategic reserves.
Barclays Capital expects a “monster” effect this quarter as the crude market tightens by 2.4m barrels a day (bpd), with little extra supply in sight...
Nothing has really changed since the IEA warned four years ago that the world must invest $20 trillion in energy projects over the next 25 years to feed the industrial revolutions of Asia and head off an almighty crunch. The urgency has merely been disguised by the Long Slump...
(26 August 2012)
Peakonomics: No Country for Old Men
David Strahan, The Last Oil Shock
In 2007 James Schlesinger claimed the intellectual arguments around peak oil had all been won. With global oil production flat-lining and prices surging towards their all-time high of $147 per barrel, the former US Energy Secretary declared “we are all peakists now”.
Five years on and global oil production has risen by 2.7 million barrels per day, prices recently slumped from almost $130 to around $90, and the sceptics are jeering “I told you so”. A recent and much-touted report by Leonardo Maugeri, an Italian oil executive, forecasts that far from running out of oil, this decade will see the strongest growth in production capacity since the 1980s and a “significant, stable dip of oil prices”.
So is that it then, panic over? Unfortunately any reasonable reading of developments in the oil market suggests otherwise...
(19 August 2012)
Originally published in the New Scientist
Will the U.S. Run Out of Oil in 8 Years?
Andrew Holland, Consumer Energy Report
I want to post a quick rant on the uselessness of statistics about a country’s oil reserves. I was preparing this afternoon to write a blog post about the revolution in oil production in the US, caused by the adoption of new technologies of fracking and horizontal drilling in areas like the Bakken Shale and the Eagle Ford Shale.
The USGS reports that, with perspective additions, the U.S. holds 32 billion barrels (bb) of oil, 291 trillion cubic feet (tcf) of natural gas, and 10 billion barrels of natural gas liquids in mean potential undiscovered reserves. This is a substantial upwards revision from last year’s estimate – showing how the new technologies are revolutionizing America’s energy outlook.
Then I started doing the math. The U.S. uses about 18.7 million barrels of crude oil equivalent per day (mbd), according to the EIA. Of that consumption, we’re importing about 8.7 mbd, and producing about 10 mbd. That works out to a total annual consumption of about 6.875 bb of oil, of which about 3.65 bb is from domestic production. At those rates, America would completely exhaust its total reserves, as estimated by the USGS at 32 bb of oil in eight years, nine months. So, by April or May of 2021, the United States would no longer have any oil – if these reserve estimates went unchanged.
Clearly, the markets do not believe that the United States, the world’s third largest oil producer, is going to run out of oil by 2021. If people expected the U.S. to stop producing oil in 2021, there would be a significant run on the oil markets...
(16 August 2012)
Oil prices are setting their own course
Saadallah Al Fathi, Gulf News
It is indeed difficult to write about the evolution of oil prices in the market of few months now. Prices seem to move against expectations, one way or another.
Since the peak of $124.12 (Dh455.9) a barrel on March 18 for the Opec (Organisation of the Petroleum Exporting Countries) basket of crude oils, prices have fallen fast to $88.74 a barrel on June 26, only to start rising again, contrary to expectations and in the light of a decision by an Opec Conference on June 14 to leave the production ceiling where it was at 30 million barrels a day (mbd). The Conference “decided that member countries should adhere to the production ceiling of 30.0 mb/d” to please those members who wanted stronger action.
Prices were expected to move downward further but the rise has been remarkable and almost continuous since then. The price on Thursday was $113.56 a barrel for the basket crude and the average for August so far is almost $109 a barrel as compared to almost $94 a barrel in June...
The fear factor is still strong in driving the oil market and while the lingering problem with Iran is taking a breather, fear of the long term is still there. Will there be enough oil to drive development? Will Opec countries carry their investment programmes as planned? Is peak oil real or a myth? Will the development of unconventional oil go unhindered in spite of widespread opposition by local residents and environmental groups? Will renewable energies become a real alternative to oil one day?...
— The writer is former head of the energy studies department at the Opec Secretariat in Vienna.
(26 August 2012)