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Total chief warns on oil output
Ed Crooks, Financial Times
The world’s capacity to produce oil will fall well short of official forecasts, the chief executive of Total warned on Wednesday
In an unusually stark prediction for the head of one of the world’s biggest oil companies, Christophe de Margerie, CEO of the French group, said it would be difficult to reach even 100m barrels a day.
The International Energy Agency, the rich countries’ watchdog, in its “business as usual” projections, has said oil supply will reach 116m barrels a day by 2030, up from about 85m b/d today. The US government has a similar forecast of 118m b/d in 2030, including a relatively small contribution from biofuels.
Mr de Margerie, however, said while forecasts could always change, “100m barrels [per day] is now in my view an optimistic case”.
He added: “It is not my view: it is the industry view, or the view of those who like to speak clearly, honestly, and not just try to please people.”
(31 October 2007)
What happens when the last drop of oil drops?
Asher Price, Salsa Verde (blog) at the Austin American-Statesman (Texas)
Houston had its Mad Max moment last month, when well-heeled investors and policy-makers convened on the oil town to talk about the post-oil world. The conference was built on the idea that the globe is fast approaching the moment of “peak oil”: the point at which oil reserves start to decline.
I wasn’t able to make it to the conference, which was organized by the Association for the Study of Peak Oil and Gas, so I asked Paul Robbins, the author of the Austin Environmental Directory, to share with us his thoughts about the goings-on at the conference, which was attended by several hundred people.
Q: Tell me about the conference. Why Houston?
PR: The conference was specifically held in Houston to do outreach to the oil industry. But there was disappointment among people conducting the conference on how few Houston oil industry personnel actually came. Other than the geologists and industry people who had a long standing interest, they seemed to see very few new industry faces. And while media from the Wall Street Journal and Bloomberg were there, as well as oil industry newsletters, there was no presence from the Houston media evident. This despite the subject and stars such as T, Boone Pickens, Matt Simmons, and even Mayor Bill White.
Q: What’s new? Oil and gas experts associated with ASPO have said that oil could peak in the 2015 to 2020 range. Are those predictions changing, and, if so, how do they square with the discovery of a rich oil patch off the Texas Gulf Coast last year?
PR: The second day of the conference, October 18, was bad news on top of bad news. If there was anything “new,” it was that the numbers were worse than previously thought.
…Paul then added this final note: Where was the Media? Peak Oil is a financial earthquake, and no one in the Austin media except the Austin Chronicle attended. I told numerous reporters about the conference and some took it seriously. But their editors did not see the importance of the issue.
(1 November 2007)
Prof says politicians blinkered on peak oil
Matthew Burrows, Georgia Straight
A UBC researcher believes elected politicians swayed by the “moneyed elite” are preventing greater action on climate change and peak oil.
Bill Rees is the originator of the ecological-footprint concept and professor in community and regional planning at UBC. He told the Georgia Straight that politicians should be “running for shelter” following the October 23 release of a report on peak oil by Germany-based Energy Watch Group.
The group’s 101-page report analyses aggregate projected supplies of crude oil in 10 of the world’s productive regions. According to the findings, world production of conventional oil peaked in 2006, supplies will now dwindle by about three percent per year, and by 2030 global supplies will be half what they were at the peak. Wars and economic strife were factors the group did not rule out. Current daily world consumption of oil hovers at about 80 million barrels. On October 26, world oil prices hit a record high, briefly surpassing US$92 per barrel.
“Everyone is afraid of it [peak oil], but it might end up having good effects,” Rees said. “What we have long needed are much more realistic energy prices that tell the truth about environmental damage. If we were paying the full social cost of automobile fuel-if we had a carbon tax that raised the price of gasoline to the real cost of using it-it would probably cost us $5 a litre.”
Premier Gordon Campbell recently declared war on climate change at the Union of B.C. Municipalities annual convention in Vancouver. However, Rees said the B.C. Liberal government refuses to cancel the $3-billion Gateway project-a twinning of the Port Mann bridge and a widening of Highway 1 from East Vancouver to Langley-which he said will cause an increase in greenhouse-gas emissions.
“The people in power are part of the moneyed elite, the corporate sector, and they take their marching orders from major corporations,” Rees said. “Nobody in Ottawa is willing to confront Alberta or the major oil companies, to whom we’ve sold off our natural assets. The automotive companies have enormous political clout because of the huge employment associated with them. And the fact they have continued to build totally market-stupid automobiles and are getting run out of the country is already panicking the politicians.”
(1 November 2007)
Legislature begins planning for oil shortage
Ken Dixon, Connecticut Post
HARTFORD – Lawmakers led by Rep. Terry Backer and Sen. Bob Duff on Thursday warned of potential dire consequences if Connecticut ignores the soaring price and plummeting worldwide availability of oil.
Backer, D-Stratford, and Duff, D-Norwalk, on Thursday formed the General Assembly’s Peak Oil & Natural Gas Caucus to investigate the issue and plan for better mass-transit, more efficient land use and better technology to cope with the coming shortage.
“We are the first state Legislature in the nation to raise this issue,” Duff said during a noon news conference. “We are flirting with $100-a-barrel oil. This is something we have to address quickly.”
“The whole nation is asleep,” Backer said. “They sit in their complacency that an endless supply of cheap oil will keep coming to our country.” While the United States offends a growing number of oil-rich countries, other nations including Russia and China are working hard around the globe contracting oil reserves, he said.
“Four to five years from now, people will be sitting in their cars, in lines for gas, if you can find it,” Backer said, stressing that the United States’ peak of domestic production was in 1971 and Mexico’s is peaking now. “I see this coming like a train over the next five years,” he said.
Shortages, Backer predicted, are just around the corner and few are preparing for it.
(1 November 2007))
Countdown to $100 oil (51) – we’ll never see 100mbd
Jerome a Paris, European Tribune
With oil prices briefly going over $96 this night, we’re definitely within sight of $100 oil. In fact, for all instances and purposes other than the actual symbolic breaching of an arbitrary round number, we are at $100 oil – in terms of burden on the economy, cost of imports, and potential impact on our energy use.
…the real news of the day is not so much the oil price today, but this prediction by Total CEO Christophe de Margerie:
The world’s capacity to produce oil will fall well short of official forecasts, the chief executive of Total warned on Wednesday.
In an unusually stark prediction for the head of one of the world’s biggest oil companies, Christophe de Margerie, CEO of the French group, said it would be difficult to reach even 100m barrels a day.
The International Energy Agency, the rich countries’ watchdog, in its “business as usual” projections, has said oil supply will reach 116m barrels a day by 2030, up from about 85m b/d today. The US government has a similar forecast of 118m b/d in 2030, including a relatively small contribution from biofuels.
Mr de Margerie, however, said while forecasts could always change, “100m barrels [per day] is now in my view an optimistic case”.
He added: “It is not my view: it is the industry view, or the view of those who like to speak clearly, honestly, and not just try to please people.”
This is a much more significant symbolic line than the $100 barrel. As all official predictions tell us, and as the rapid growth in both emerging countries like China and oil producing countries like Saudia Arabia or Iran underline, demand for oil is very likely to reach that level in less than 10 years unless we see massive behavior changes. Margerie is telling us that we are looking to serious imbalances between likely demand and likely supply in the very near future, and “suggested the tightness of supplies would be likely to keep prices higher.”
It’s quite simple in fact. Supply is constrained by lack of production capacity (whether this is because of depleted resources or, like Margeris proposes, voluntary limitation of investment by oil-rich countries, is irrelevant). Demand will need to adjust. Prices will thus rise enough to cause demand destruction. Today’s prices have only cut growth in the West so far (demand has been flat for 2-3 years even in the US) but nowhere else. So we’ll need significantly higher prices to have overall stabilisation of demand, including very real demand reduction in the West and much lower growth elsewhere.
Given how little we’ve reacted so far, I expect that we’ll meed multiples of today’s prices to see such changes.
(1 November 2007)
Also at Daily Kos.
ODAC News – Nov 1
Douglas Low, Oil Depletion Analysis Centre
Oil / Petrol Prices
1a/ Soaring oil climbs past $96 mark (BBC News, Thu 01 Nov)
1b/ Oil Traders Raise Bets on $125 Crude as Options Jump (Bloomberg, Thu 01 Nov)
1c/ Gasoline in Europe Rises to Two-Year High on U.K. Refinery Fire (Bloomberg, Thu 01 Nov)
1d/ Giving thanks for $100 oil (Market Watch, Thu 01 Nov)
Review of Energy Watch Group Peak Oil Report
2/ Energy questions that will need to be answered (Liverpool Daily Post, Mon 29 Oct)
Oil and Money Conference – Media Reports
3a/ World oil output struggling, say Arab experts (Reuters, Tue 30 Oct)
3b/ Finfacts Ireland Summary of the Oil and Money conference (Finfacts, Wed 31 Oct)
3c/ Total chief warns on oil output (Financial Times, Wed 31 Oct)
Oil and Money Conference – David Strahan Reports
4/ Oil and Money conference interviews: Sadad al-Huseini and Fatih Birol (lastoilshock.com, this week)
4a/ Oil has peaked, prices to soar – Sadad al-Huseini (lastoilshock.com, Mon 29 Oct)
4b/ Oil reserves over-inflated by 300bn barrels – al-Huseini (lastoilshock.com, Tue 30 Oct)
4c/ IEA reviews reliance on USGS resource estimates (lastoilshock.com, Wed 31 Oct)
Economy – UK
5a/ Surge in 100% mortgages means thousands risk negative equity (The Guardian, Wed 31 Oct)
5b/ Rock’s wholesale run (BBC News [Robert Peston], Thu 01 Nov)
5c/ Credit crunch ‘may cause price fall’ (The Telegraph, Thu 01 Nov)
5d/ House price gloom as the wealthy turn away (The Times, Mon 29 Oct)
Energy Supplies – UK / Malcolm Wicks
6a/ Rising fear of energy crisis this winter (The Guardian, Wed 31 Oct)
6b/ EDF given green light to build gas-fired power plant (The Guardian, Wed 31 Oct)
6c/ ‘Climate Change + Peak Oil = Cutting Carbon + Resilience Building’ or ‘Why Malcolm Wicks Really Hasn’t Got This Peak Oil Thing…’ (Transition Culture, Mon 29 Oct)
Canadian Business on Peak Oil
7/ Big questions, big answers (Canadian Business, Wed 31 Oct)
Peak Gas / Peak Oil – Energy Intelligence
8a/ Twin Peaks — Will ‘Peak Gas’ Soon Join ‘Peak Oil?’ (Energy Intelligence [Energy Intelligence Briefing], Wed 31 Oct)
8b/ Global Oil Production to Plateau in 2012 (Energy Intelligence [International Oil Daily], Wed 31 Oct)
8c/ Peak Gas Could Be Coming Sooner Than You Think (Energy Intelligence [World Gas Intelligence], Wed 31 Oct)
(1 November 2007)
