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IEA: Oil supplies ‘face more pressure’
World oil demand will rise faster than expected, while supplies will remain tight, the latest International Energy Agency (IEA) report has warned.
The IEA predicted demand would rise by an average 2.2% a year between 2007 and 2012, up from previous estimates of 2%.
It added that geo-political tensions and a lack of spare capacity in Opec production would also limit supplies.
By 2012, biofuel production would hit 1.8 million barrels, more than double 2006 levels it said.
However, while supplies of the green fuel are set to surge, it is likely to remain marginal with just a 2% slice of the energy market, the IEA said.
It also echoed warnings issued in an Organisation for Economic Development report that rapidly growing biofuel market will increase the price of certain feedstocks – such as sugar and corn – over the coming year.
(9 July 2007)
IEA sees oil supply crunch looming
Alex Lawler, Reuters
World oil demand will rise faster than expected to 2012 while production lags, leading to a supply crunch, the International Energy Agency said on Monday.
In its Medium-Term Oil Market Report, the adviser to 26 industrialized countries said demand will rise by an average 2.2 percent a year between 2007 and 2012, up from a previous medium-term forecast of 2 percent.
The outlook, which updates an IEA forecast last issued in February, coincides with a jump in oil prices to more than $75 a barrel, closing in on a record high near $79, on concerns of a tightening market.
“Despite four years of high oil prices, this report sees increasing market tightness beyond 2010,” the IEA said.
“It is possible that the supply crunch could be deferred — but not by much.”
(9 July 2007)
Countdown to $100 oil (42) – IEA predicts shortages within 5 years
Jerome a Paris, Daily Kos
Oil has been above 70$/bl for the past 3 months, but this is no longer news as it is below the “highest ever”. And yet, this comes at a time with no obvious geopolitical crisis (Iranian rumblings are in fact rather more tuned down these days), with some problems in Nigeria, but barely more than has been the norm lately…
IEA warns of global oil shortage [Financial Times]
The world economy faces a tight oil market in the next five years on a combination of accelerating consumption and output falls in mature areas, such as the North Sea, and long delays in new production projects.
The warning on Monday by the International Energy Agency, the energy watchdog, comes as oil prices surge above $76 a barrel, to $2.50 a barrel below last summer’s all-time high of $78.65.
The prognosis is based on the expected two items I’ve been discussin ad nauseam in my diaries: relentless demand growth, and tightening supplies:
The IEA said in its Medium Term Oil Market Repot that “oil looks extremely tight in five years time” and there are “prospects of even tighter natural gas markets at the turn of the decade”.
The IEA forecast that demand will grow at an annual rate of 1.9 per cent during the next five years, to reach 95.8m barrels a day in 2012. China and other emerging countries will lead the increase in consumption.
(9 July 2007)
Discussion about the IEA report in today’s TOD Drumbeat.
IEA’s Medium-term oil markets report (PDF)
Interational Energy Agency via Wall Street Journal
82-page PDF. The IEA’s report which is the subject of the above articles.
Prediction #1 (of 3) from Oil Expert Matt Simmons:â€˜Real Risk’ Gas Pumps Run Dry This Summer
Energy Tech Stock
…[Matthew] Simmons told EnergyTechStocks.com that U.S. refineries simply aren’t capable of running at a sufficiently high capacity to produce enough gasoline for the many millions of American motorists who, despite ever rising pump prices, continue to drive more miles each year. “The refineries are too old,” he said.
Simmons made an analogy between an old house whose plumbing and wiring have been modernized and an old oil refinery which, like U.S. refineries, has had its equipment modernized. “It’s still an old house,” he said.
To be sure, thanks to increasing amounts of refined gasoline imported from Europe, up until now America has been able to quench motorists’ thirst. But Simmons believes that imports can no longer fill the breach. “We’ve pretty well drained that option,” he told EnergyTechStocks.com, adding that it would take years before any new refineries that were built in the U.S. would make a significant difference in available supply.
How might the gas shortage that Simmons fears unfold?
“You won’t see it until it’s happened,” he said. It could start in any region of the U.S., he added, and once the media gets wind of it, Americans everywhere will rush to “top off” their gas tanks, exacerbating the situation until it becomes a full blown emergency.
Part 2 of 3 will appear tomorrow
(9 July 2007)
Shell CEO Says Conservation Isn’t Enough
Alex Markels, US News & World Report (?) via Yahoo!News
You might expect the chief executive of the world’s second-largest oil company to pooh-pooh the recent surge of interest in renewable energy. But despite Royal Dutch Shell CEO Jeroen van der Veer’s recent contention that the public has placed too much faith in the potential for solar and wind energy, the 59-year-old Dutchman raised some eyebrows when he simultaneously argued that the world can meet its demand for energy and control greenhouse gases over the next half-century while still relying on fossil fuels to supply 70 percent of the world’s energy needs.
Q: How is that possible?
Well, the first priority is conservation, because more than half of the energy we generate today is wasted. Take the average car, which uses about 20 percent of the gas to move it forward; the rest is lost to heat. We can help by making better, cleaner-burning fuels, and the car companies can help by making more fuel-efficient cars.
Q: So what are you doing to conserve energy?
Well, you won’t see me in an SUV. And I’ve just installed solar electricity panels on my roof, although I’d have to live a long time to get payback.
Q: Speaking of payback, one way Europe has increased energy efficiency is by imposing big taxes on gasoline. Should we have higher gas taxes in the United States, too?
We can make good estimates of what would happen if you increased gas taxes: People will buy less fuel, and they’ll use it more conservatively. So I can see the logic that says “tax gas.” But in the end, this is for government to decide.
Q: OK, say the government increases the gas tax, and we all buy hybrid cars. Can we get to where we need to be through conservation alone?
It’s extremely important but, no, conservation isn’t enough. The biggest reason is that energy demand is accelerating; even with conservation, it will double by the year 2050. At exactly the moment that demand for energy is surging, more and more of the world’s conventional oil fields are going into decline. So supplies of oil and gas that are easy to extract will struggle to keep up with demand, which means increasing use of unconventional fossil fuels, such as oil sands, including and especially coal.
(6 July 2007)