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Peak oil - Feb 8


The next conservative energy policy

Rep. Roscoe G. Bartlett, National Ledger
President George W. Bush was half right and half wrong about oil in his State of the Union speech. "America is addicted to oil, which is often imported from unstable parts of the world," he said. However, we can't "break this addiction through technology" alone. Two words conservatives should champion were missing from his speech: conservation and efficiency.

Current U.S. energy policy and the President's Advanced Energy Initiative are too modest and overly focused on the goal of increasing domestic production of oil and alternatives to support increasing oil consumption. This is futile and self-defeating because U.S. oil production is in permanent decline and world oil production will follow - perhaps disastrously soon.

...Technology and alternatives are important. However, unless we also use less oil, we won't reduce America's oil imports. Delayed gratification and self-sufficiency are traditional conservative values. That is why the next conservatism should champion policy changes to use less, not more oil through conservation and energy efficiency. Conservatives should recognize that unless we have a national energy conservation program with the commitment, breadth and intensity of the Apollo moon mission and the Manhattan Project to create the atom bomb, our country is unlikely to achieve the goal of replacing "more than 75 percent of our oil imports from the Middle East by 2025" and even less likely to break our oil addiction.

Roscoe G. Bartlett, a Republican, represents the Sixth District of Maryland in the U.S. House of Representatives.
(7 February 2006)


Peak oil: accounting controversy looms

Dr. Joe Duarte, Rigzone
Oil companies want to change reserve accounting rules raising questions about the timing with regards to peak oil.

According to the Wall Street Journal big oil companies have issued a report with the goal of justifying how they account for their own strategic reserves.

The companies think that they can "be the best judge of their own stores of oil and gas rather than use a strict formula imposed by the Securities and Exchange Commission. The companies argue that the SEC's method -- intended to provide investors with apples-to-apples comparisons -- is archaic and arbitrary, and undercounts the amount of energy on tap for the future."

The key to the whole situation is how fast a company replaces the oil it pulls out of the ground, a key measure used by Wall Street to give the company's stock their trading value.

The issue is complex, as "securities analysts don't necessarily agree with the SEC's conservative guidance on how to account for oil and gas in the ground, but they also tend to doubt the companies' optimistic forecasts of their stores."

Some in the business, such as "Matthew Simmons (Author of "Twilight In The Desert), a Houston-based energy investment banker and among a crowd of forecasters who believe the world is running short on oil, says the SEC rules should be even stricter."
(7 February 2006)

ExxonMobil sees 50% increase in energy demand
Arab News via Menafn.com
JEDDAH — Scott Nauman, ExxonMobil's corporate planning manager, highlighted that his company expects an increase of about 50 percent in global energy demand, reaching close to 335 million barrels per day by the year 2030.

Nauman, who also serves as ExxonMobil's manager of the economy and energy division, expressed the oil multinational company's global energy future outlook in a presentation hosted by the Saudi Arabian General Investment Authority (SAGIA) on Saturday in Riyadh.

...ExxonMobil expects the world's population to grow to eight billion by 2030. This is approximately 25 percent higher than today's population level. Coinciding with this population growth is the continuing economic growth, both in developed and developing economies. According to Nauman, this combination of population and economic growth would lead to a primary energy demand increase of approximately 50 percent. The vast majority (80 percent) of the increase is expected to occur in non-OECD (Organization of Economic Cooperation and Development) member countries.

...Oil, gas and coal will remain predominant energy sources with approximately 80 percent share of total energy. These well-established fuel sources are the only ones with the versatility and scale to meet the majority of the world's growing energy needs. Nuclear power will likely be a growing option to meet electricity needs. Alternative fuels, like solar and wind power, will grow rapidly, underpinned by government subsidies and mandates. But even with assumptions of robust 10 percent per year growth, solar and wind will represent just one percent of the total energy portfolio by 2030.

Nauman also addressed the supply outlook. A discussion of global oil resources highlighted the long life supply that still remains. A world liquid production outlook explored the trends among OPEC and non-OPEC production. Natural gas supply and demand, including liquefied natural gas, were also addressed.
(7 February 2006)
The outlook for supply doesn't seem as clearly defined as the outlook for demand. -BA


Will Iran dispute push oil to $130?

Chris Isidore, CNN/Money
While the U.S. imports no Iranian crude, worries about Tehran's nuclear program are boosting prices. It could get a lot worse if the spigot is shut off.
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Not a drop of oil from Iran reaches the nation's gas pumps. But escalating tensions about Iran's nuclear program are already being felt in oil and gas prices in the United States.

That's because even though the United States has banned oil imports from Iran since the 1979 Iranian revolution, some 4 million barrels of Iranian crude are shipped around the world each day, accounting for about 5 percent of global supply. That has an effect on prices everywhere, no matter how much or how little Iranian oil reaches U.S. refineries.

And the growing dispute over Iran's nuclear program is one key reason oil prices have jumped since late December back near $65 a barrel.

Some experts say oil would be closer to $60 a barrel absent worries about possible broader sanctions against Iran, and at least one analyst says oil could shoot to more than $130 a barrel, if Iranian oil stopped flowing altogether.

Fortunately for world oil markets, most experts see little chance of a complete shutdown of Iranian oil due to the dispute over its nuclear program.
(7 February 2006)
Related:
Beware the Ides of March (CounterCurrents). Also posted here.


Big Oil is rich, getting richer ... and dying

Jerome a Paris, Daily Kos
...new investments are NOT HAPPENING. This is certainly not a question of profitability, nor of availability of finance. It means, quite simply, that the big oil companies have almost nowhere to invest their money, and that shows in their stagnant, or declining production levels (note that BP's jump between 2003 and 2004 comes from the incorporation of half of Russian producer TNK in its numbers).

Why are they not investing? Because there are no reserves left accessible to them. A number of countries are totally closed to them, and those that are open put increasingly tough conditions - and only offer extremely difficult and costly fields, like ultra deep offshore, Kashagan in Kazakhstan, or oil sands in Canada. The fact that these fields are extremely difficult actually hides the investment situation, as the oil companies are barely investing more money in fields that cost a lot more to develop - which means that they will get less production from that money...

So the big profits of the oil majors are not the triumph of the industry, they are its swan song, and it is actually right that money is taken out of the industry and given back to shareholders to invest elsewhere.

Our task is to make sure that this elsewhere includes those industries that will help us cope with an oil-poor world.
(7 February 2006)

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