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The CEO Poll: On black gold
Joe Castaldo, Canadian Business
Peak-oil theory has steadily been gaining traction over the years. A survey conducted recently by COMPAS Inc. found a majority of Canadian CEOs polled subscribe to peak-oil theory — the idea that the planet is running out of easily accessible and economical oil — but believe it is difficult to predict when peak production will occur.
More than 60% of the 117 CEOs agreed with the theory. Only 18% said new technologies and new discoveries will always allow for production increases. Another 16% not only espoused the peak-oil view but said we will be unable to satisfy demand in the near future.
“Finding easy-to-get-to oil is a thing of the past,” wrote one CEO. “Demand in the developing countries will increase as wealth builds. They will not have the money for new technologies. That will fall to the developed countries.”
(8 June 2009)
Shell’s Willem Schulte says we have enough oil, for now (text and podcast)
Earth & Sky Radio Series
Willem Schulte: The world is not running out of oil, not at the moment.
That is Dr. Willem Schulte, Chief Scientist for Reservoir Engineering for Shell. He says that while there is a lot of oil and natural gas remaining, its getting harder to recover.
Willem Schulte: For the medium term, we have enough hydrocarbons to supply to the world. In the past, we have produced one trillion barrels of liquid oil. There are still two trillion barrels, or twice as much, to be gained from those same reservoirs. We probably can add three to four trillion barrels of oil from unconventional, more complicated methodologies to recover oil, which we considered unrecoverable so far.
(8 June 2009)
High oil prices and the end of globalization really?
Roger Tissot, Petroleum World
… The world of oil can be divided into two basic camps: the oil pessimists who adhere to the peak oil theory, and the oil optimists who think that given the right economic incentives, human ingenuity and technology, we would be able to find more of the “black gold”.
Jeff Rubin, a Canadian economist “guru” and for 20 years the chief economist of the Canadian Imperial Bank of Commerce, has written a fascinating book about what the world may look like in the era of peak oil and three digit oil prices ( Why Your World is About to Get a Whole Lot Smaller: Oil and the End of Globalization, by Jeff Rubin, Random House Canada ) Rumors are that the book cost Mr. Rubin his job at the bank. I do not know, but I am not surprised to see the bank unhappy with their chief economist moving from forecasting interest rates or GDP growth to futurology.
Rubin’s premise follows that of Dr. Colin Campbell, by whom you can find extensive reading and analysis at the Association of the Study of Peak Oil, http://www.peakoil.net/ , which suggests that “global oil production will soon be in the backside of the Hubbert curve…daily production would soon peak, plateau and then begin its irreversible decline”. The Hubbert curve is the bell shaped curve the famous American Geologist King Hubbert referred to when describing the life of an oil reservoir.
Rubin puts oil at the center of the economy, and according to him it is thanks to cheap oil that modern globalization was possible.
Roger Tissot is associated Consultant in Gas Energy Latin America & Energy Fellow of the Institute of the Americas, La Jolla, Calif
(7 June 2009)
An Alternative National Energy Security Assessment for Australia
Cameron Leckie (ASPO Australia), The Oil Drum: Australia/New Zealand
An election commitment of the Rudd Labor Government was to develop an assessment of Australia’s future energy security. This resulted in the release of the National Energy Security Assessment (NESA) in March 2009. The liquid fuels section of the NESA was largely based on the findings of ACIL Tasman’s Liquid Fuel Vulnerability Assessment (LFVA).
Given the importance of liquid fuels to both the global and Australian economy, it is reasonable to expect that the Australian Government would provide a realistic appraisal of Australia’s future liquid fuels security. Both the LFVA and the NESA fail to address key questions resulting in a liquid fuels security assessment that is overly optimistic. This post will explore the key weaknesses of the NESA and LFVA and propose an alternate, more realistic assessment of Australia’s liquid fuels security.
What is energy security?
The Department of Resources Energy & Tourism (RET) defines energy security as the adequate, reliable and affordable supply of energy to support the functioning of the economy and social development, where:
- Adequacy is the provision of sufficient energy to support economic and social activity;
- Reliability is the provision of energy with minimal disruptions to supply; and
- Affordability is the provision of energy at a price which does not adversely impact on the competitiveness of the economy and which supports continued investment in the energy sector.
On the face of it, both the NESA and LFVA appear to be a comprehensive analysis of Australia’s liquid fuel security situation. However both reports ignore or avoid the critical issues that will impact upon Australia’s future liquid fuel supply. This results in an inappropriate assessment of Australia’s liquid fuel security. The unfortunate consequence is that Australia is likely to face significant economic and social hardship over the next few decades as our liquid fuel security declines. The really disappointing aspect is that much of this hardship could be avoided through a realistic liquid fuel security assessment and appropriate policy responses. This poses the interesting question of why have these issues been avoided?
(5 June 2009)