Peak oil - Aug 9
Click on the headline (link) for the full text.
Many more articles are available through the Energy Bulletin homepage
New ASPO-Ireland Newsletter (PDF)
Association for the Study of Peak Oil and Gas - Ireland
Latest issue has just been posted. Contents:
- When will they ever learn?
- People Eat
- Country Assessment Series - United Kingdom revisited
- Regional Assessment - AFRICA
- Ireland begins to formulate a post-Peak Energy Policy
- Brilliant Australian Peak Oil Programme
- ASPO International Conference
WT writes: "For me the two most interesting things in this issue are the graphs in
"Regional Assessment - AFRICA") and the article on Nomenclature which begins:
Analysing the depletion of oil is intrinsically a simple task based on the
volume of oil in the ground and the rates of discovery and extraction.
The primary difficulty is the grossly unreliable database, exhibiting a
wide range of estimates from different sources, with many displaying
serious internal inconsistencies. Another difficulty is the definition of the
various terms in wide use. In particular the term Reserves is primarily a
commercial, financial or political term.
It might be worth trying to establish a new code along the following lines
for oil depletion analyses, leaving the existing flawed and confused system
in place for those finding it useful for stock exchange reporting and
political manouvering. It would also facilitate the flat-earth economists
who could predict future production to a cutoff date on whatever basis
they prefer, ignoring the physical constraints of geology.
Editorial, Chicago Tribune
Forget about the price of gas for a moment. Think instead of all the oil sitting deep below the earth's crust, waiting millions of years to be pumped to the surface, refined and used in all the ways that drive modern civilization.
That resource, scarcely touched before the dawning of the automobile age, is destined to decline. It's a natural resource. It's not the sun or the wind, inexhaustible and eternal for our purposes. And whether you believe the Jeremiahs or the most conservative analysts, the day is coming--faster than you may think.
Last Sunday, Tribune correspondent Paul Salopek took readers on an extraordinary journey. In "A tank of gas, a world of trouble," he traced tanks of gas pumped at a suburban Marathon station to sources around the world, from the coast of Nigeria to the fields of Venezuela.
And he delivered a powerful message, one that many Americans seem unprepared to absorb: "Our nation's energy-intensive joy ride, powered by 150 years of cheap petroleum, may finally be coming to an end. This could be as good as it gets." As good as it gets. That's a haunting phrase for those who wince at $3-plus gas at the pump. You mean, it could be higher?
Even the rosiest estimates show oil production peaking by midcentury and then diving. The next decades portend higher prices, more competition. This is not, as one analyst says, a temporary Arab oil embargo, as in the 1970s. It will not be "your father's energy crisis."
Some may dismiss this as fear mongering. Some will imagine that new technology or new oil discoveries will save America from an apocalyptic post-petroleum world. Maybe they're right. But if there ever was a time to be aggressively exploring alternative energy sources, if there ever was a time for Americans to reconsider their gas-guzzling autos, if there ever was a time to prepare for a world where $3-a-gallon gas will, in retrospect, seem cheap, this is it.
In a single lifetime, from 1940 until today, the United States has gone from producing 63 percent of the world's oil--being the Saudi Arabia of the world, as Salopek writes--to pumping 8 percent. Now an increasing amount of America's oil comes from Africa, from places, for instance, in Nigeria where thugs and militias "flourish in the lawless squalor" of the oil patch. Corruption, pollution, poverty, violence, all threaten Africa--and those fields.
The solution isn't only about increasing auto mileage standards, drilling for oil in heretofore pristine wilderness or funding research into promising new technologies. That won't be nearly enough. This is about 300 million Americans making decisions every day about how they use energy--and changing behaviors ingrained for decades.
Here's a theoretic figure that is hard to ignore: $8 a gallon. That is the hidden cost of imported oil, according to Milton Copulos, a respected analyst with the National Defense Council Foundation in Washington. Copulos examined such factors as oil-related defense spending in the Middle East and calculated U.S. jobs and investments lost to steep crude prices, Salopek reported. When he isolated the hidden costs of Middle Eastern crude in particular, the price jumped to $11.
Next time you're at the pump, shaking your head about $3 gas, start multiplying.
Copyright © 2006, Chicago Tribune
(6 Aug 2006)
Requires free registration. Good work Chicago Tribune! Paul Salopek's series, "A tank of gas, a world of trouble" and the accompanying video are highly recommended.
The Chicago Tribune and the Cleveland Plain Dealer are the only two major American newspapers to address peak oil directly in editorials, as far as I know. (The New York Time ran a good piece by a senior member of its editorial staff, but that editorial was behind a paywall and never appeared in the print edition.)
Malaysia oil fears prompt Petronas to buy into Russian producer
John Burton, Financial Times
Concerns about Malaysia's dwindling oil reserves have been underscored by a recent decision by Petronas, the state energy group, to take a stake in Rosneft, the Russian oil producer.
The $1.1bn (€855m, £575m) deal to gain access to Russia's oil fields comes after Petronas recently reported that domestic oil production last year had fallen by nearly 5 per cent to 700,000 barrels a day. Malaysia is south-east Asia's largest oil producer after Indonesia.
Petronas blamed the decline on shutdowns for "major maintenance and repair works in several fields" operated by joint venture partners, which include ExxonMobil and Royal Dutch Shell.
But it expressed confidence that proved and probable crude oil reserves of 5.25bn barrels meant that Malaysia still had 20 years of oil reserves at current rates of production.
Independent analysts estimate that Malaysia has about 14 years of oil production left, if only proved reserves of 4.2bn barrels are taken into account.
"Mature fields are declining faster than new fields coming on stream," said a London-based energy analyst with an international bank. "They are definitely not replacing reserves with new discoveries too well. In 1995, the [proved] reserve figure was 5.2bn barrels."
The decline in Malaysian oil production could affect future economic growth, since oil represents about 9 per cent of Malaysian exports. The oil industry accounts for about 30 per cent of government revenues when the country is struggling to cut a budget deficit.
Najib Razak, the deputy prime minister, warned last year that Malaysia could become a net oil importer by 2009 if it did not find new oil reserves and domestic demand continued to surge. "This means we cannot continue to lean on the oil sector," he said.
Declining oil production in Malaysia and Indonesia and Brunei means that east Asia will rely more on the Middle East, Russia and Africa for future supplies.
(8 Aug 2006)
CERA: oil supply still plentiful
Dan Piller, Star-Telegram (Fort Worth, Texas)
A worldwide energy consulting firm said Tuesday that fears of the world reaching “peak oil” supply, and facing a resultant crisis as demand continues to grow in the developing world, are overblown and that the world may actually see a 25 percent increase in supply by 2015.
The conclusion by Cambridge Energy Research Associates of Cambridge, Mass., shows that world crude oil production capacity could rise from the current 88 million barrels per day to 110 million barrels in the next nine years.
The new oil capacity will come mostly from so-called “unconventional” sources such as ultra deepwater drilling in the Gulf of Mexico and offshore Africa and South America, as well as extra-heavy oils extracted from sands in Canada and Venezuela and elsewhere, plus new capacity that will be brought in by traditional Middle East producers, such as Saudi Arabia.
That new capacity will make up for the decline in mature fields such as in Texas and Oklahoma, which despite a renewed burst of drilling and closer spacing of wells in the Permian Basin of West Texas.
...Yergin’s report attempts to refute two theories that have gained currency in recent years. One is so-called “Peak Oil,” which holds that worldwide crude oil production already has hit its peak and will soon begin decline, plunging the world into an environment of high prices, shortages and economic calamities.
Yergin said flatly “the much-discussed ‘Peak Oil’ is not imminent.”
The report also states that, , that Saudi Arabia has more productive capacity and can be expected to bring it online within the decade. That is contrary to well-publicized concerns by Houston investment banker Matthew Simmons that Saudi Arabia is near it’s peak production.
(8 Aug 2006)
World oil supply poised to outpace demand: CERA (Financial Express, India)
Global Petroleum Capacity to Rise 25 Percent by 2015 (Bloomberg)
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