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Total energy executive on the end of oil: ‘We have to save, save, save’
Anselm Waldermann, Spiegel (Germany)
The world could run out of oil in 20 years. This grim scenario is not the prediction of environmentalists, but of Michel Mallet, the general manager of French energy giant Total’s German operations. In an interview, Mallet calls for radical reduction of gas consumption and a tax on aviation fuel.
… Mallet: Oil production will be technically complex in the future, which makes it expensive.
SPIEGEL ONLINE: Why?
Mallet: There are hardly any readily accessible oil fields anymore. The fields on the floor of the North Sea, for example, are practically empty. New reserves are only being found deep in the ocean, in remote regions like Kazakhstan or in the form of oil sands. None of this is cheap to produce.
SPIEGEL ONLINE: The International Energy Agency is warning of a new mega-crisis, arguing that because the oil companies are not investing enough in production, the price of oil could shoot up to $200 by 2013.
Mallet: A price of $200 would be dramatic for the world economy. If we were to gradually move in that direction, it would be okay. Then we’d have time to develop alternative technologies. But not by 2013. That’s not enough time.
… SPIEGEL ONLINE: Is it even possible to increase oil production anymore?
Mallet: About 87 million barrels a day are produced worldwide. In the past, it was believed that this number could be increased to 130 million. I consider that an illusion. Realistically, the capacity is less than 105 million barrels.
SPIEGEL ONLINE: It sounds like the peak oil theory, which isn’t very popular among your competitors. It holds that maximum production will be reached soon.
Mallet: The old oil fields are dying. In the future, we will have to invest more and more just to maintain existing production.
SPIEGEL ONLINE: Is the age of oil coming to an end?
Mallet: No, not really. There is plenty of oil, geologically speaking. The question is just how much can be produced a year.
(14 April 2009)
Article Review: Depletion and the Future Availability of Petroleum Resources
Rembrandt, The Oil Drum: Europe
In the last edition of the Energy Journal of the International Association for Energy Economists an article was published that concluded that the recent high oil price spike was just an aberration, as there is plenty of low cost oil out there waiting to be produced. This claim was made by a group of scientists from the Pontifical Catholic University of Chili and Colorado School of mines, R. Aguilera, R. Eggert, C. Gustavo Lagos and J. Tilton. In this post I critically review this study showing that many important factors have not been taken into account by Aguilera et al. (2009), making it highly probable that their conclusion is incorrect.
(15 April 2009)
The Upside of Piracy
Nicholas von Hoffman, The Nation
… For years now, robbery on the high seas has been growing more frequent and more bold. It stands to reason the pirates are using some of their loot to buy more powerful weapons, larger boats and better electronics with which to commit bigger and more profitable crimes. The worst may be yet to come.
There is a plus side to that for us as well as the pirates. The more ships they capture, the more ransom, the people kidnapped, injured and killed, the greater the fear in the world of shipping and the higher the insurance rates. One of these days, rates will jump over the moon when a pirate attack results in a horrific incident such as a ship sinking or an oil tanker spilling crude into the ocean. The possibilities for bad things stretch over the horizon.
As the danger mounts, the insurance costs rise and sailors grow more reluctant sign on to ships plying these seas, the higher will go the costs. The slow-moving, defenseless oil tankers with their cargoes rivaling in value those of the sixteenth-century Spanish treasure galleons that pirates of the past feasted on will seek another, safer, route to Europe. Instead of passing through the Suez Canal, they will take the longer, costlier path around the southern tip of Africa.
The end result will be that the world price of crude oil will rise just as though the oil-producing nations had cut production. Oil, as they always instruct us, is a fungible commodity–if the price goes up in Europe or Tokyo, it goes up everywhere, including at the pump in Iowa or California.
In a trice, the pirates of Somalia will have accomplished something Congress ought to have done but has not had the guts to do since Jimmy Carter’s time. They will have slapped on an additional gas and oil tax, the single most effective way of motivating people and businesses to conserve energy. The drop in oil imports will do wonders for our adverse balance of trade.
(14 April 2009)
The ‘Peak’ Summit: An Informal ASPO & Oil Drum Gathering (June in Italy)
Rembrandt, The Oil Drum: Europe
An informal Oil Drum -ASPO meeting is being organized in Italy in June of this year. Oil Drum readers are welcome to join the discussion with Oil Drum staff and ASPO members. This meeting, to take place on 26, 27 & 28 June in Italy at the “Alcatraz free University” near Perugia, will have a spontaneous self-organized program according to the ‘bar camp’ rules. People can bring any topic to the informal meeting that they want to discuss. The only limitation being the wide ‘systems boundary’, so that issues should be directly or indirectly related to the heart of ASPO & The Oil Drum, discussions about energy and our future.
(15 April 2009)
