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Life at the summit

Michael Klare, The National (Abu Dhabi)
Energy experts continue to debate whether the world has already reached a peak in global oil output or if the moment of maximum yield still lies years ahead. But if we could look back to today from 50 years hence, the difference between a peak in 2008 or, say, 2015 is largely immaterial: for all practical purposes we are now perched on the summit of the depletion curve of world petroleum, and will remain in this territory – a rounded crest when seen from afar, not a sharp apex – for some years to come. There is nothing further to be gained by arguing about the precise moment of peak oil, or from seeking to delay its arrival. From now on, our overarching challenge is to adjust to life on the petroleum summit.

One might naturally assume that life on the summit would be especially comfortable. After all, there is more oil being pumped today than ever before. It is likely, moreover, that we can count on continued high levels of output for another decade or so, probably augmented by additional liquids derived from Canadian tar sands, Rocky Mountain shale, biofuels and other “unconventional” fuel sources. But the price of oil has shattered all previous records and there appear to be no barriers to its continued rise. Other vital products derived from petroleum or reliant on its ready availability – petrochemicals, plastics, pesticides and food – have also risen in cost, adding to our economic woes.

What, then, distinguishes this new era from that which preceded it?
(3 July 2008)

Medvedev Sees Oil Price at $150, Slower Global Growth

Halia Pavliva and Christian Schmollinger, Bloomberg
Dmitry Medvedev, the president of Russia, the world’s second-biggest oil producer, expects prices to rise to $150 a barrel and retard global growth.

“Oil prices will reach $150 a barrel,” Medvedev said in a meeting with reporters in Moscow ahead of his participation in a summit of the Group of Eight industrial countries in Japan on July 7-9. “Unfortunately, rising oil prices create problems for the world’s economy.”

… Russian oil production declined in June, bringing the nation closer to its first annual drop since 1998. Output fell to 9.77 million barrels a day (or 40 million metric tons a month), 1 percent less than June last year, according to data released by CDU TEK, the dispatch center for the Energy Ministry.

Medvedev said Russia should diversify its economy away from oil.
(3 July 2008)

Middle East oil consumption shows strong growth

Bahrain Tribune via MENAFN
Middle East oil consumption showed above average growth of 4.4 per cent during 2007 as regional and global production fell for the first time since 2002, according to the recently released 2008 BP Statistical Review of World Energy.

The rise in Middle East oil consumption to 6.2 million barrels/day reflected the region’s continued strong economic growth mirroring a worldwide trend of increasing demand from emerging markets. In percentage terms, the Middle East regional increase in oil demand was the world’s third highest after Latin America and Africa. Middle East oil production fell by 1.8 per cent to 25.2 million b/d on the back of OPEC production cuts in late 2006 and early 2007. The decline was partially offset by a seven per cent increase in production from Iraq.
(3 July 2008)

Oil Megaproject Update (July 2008)

Khebab, The Oil Drum: Canada
This is an update on the Wikipedia Oil Megaproject Database maintained by the Oil Megaprojects task force (Ace, Stuart Staniford, myself and many others). The database contains now more than 425 separate entries and is growing everyday. Despite the database growth, the outcome seems to become more pessimistic with time. The derived net new capacity (i.e. once depletion from existing production is included) is around 1 mbpd until 2010 with a jump at 2 mbpd in 2008 then depletion may dominate.
(4 July 2008)