Peak oil, prices, and supplies - Aug 13
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Tradable Energy Quotas (TEQs): A Policy Framework for Peak Oil and Climate Change
All Party Parliamentary Group on Peak Oil (APPGOPO) & The Lean Economy Connection
This report was commissioned by the All Party Parliamentary Group on Peak Oil, which invited The Lean Economy Connection to write a summary review of Tradable Energy Quotas (TEQs), giving particular attention to their application as a means of ensuring fair entitlements to fuel under conditions of scarcity.
(11 August 2009)
From the report:
The All Party Parliamentary Group on Peak Oil was set up in July 2007 to review estimates of future oil production and consider the consequences of declining world oil production for the UK and world economy.
The Lean Economy Connection is an independent research centre founded by David Fleming to develop the application of lean thinking to environment policy in 1994. Dr Fleming first described the model of Tradable Energy Quotas (TEQs) in 1996. His book, Lean Logic, is forthcoming in 2010.
Shaun Chamberlin joined The Lean Economy Connection as TEQs Development Director in 2006. His first book, The Transition Timeline, was published in March 2009 (Green Books). His wider work is detailed at: www.darkoptimism.org
Thanks to APPGOPO Group Secretariat Neil Endicott for pointing to this report. -KS
Oil May Fall Below $10 in Next Decade, Prechter Says (Update1)
Dinakar Sethurama, Bloomberg.com
Crude oil may plunge to less than $10 a barrel in the next decade after surging to a record $147 last year, said Robert Prechter, who achieved fame for cautioning on Oct. 5, 1987, that stocks would crash.
“I expect crude oil prices to fall below $10 a barrel sometime over the next decade,” Prechter, founder of Elliott Wave International Inc., said in an e-mail yesterday. “It took many years for it to achieve $147.50, and it will take a long while for the full retreat to occur.”
Oil should fall to between $4 and $10 a barrel based on a technical analysis called Elliott Wave principle, Prechter said in the Elliott Wave Theorist report last month. The forecast rests on a “supercycle” theory, which through a series of five waves from last century suggests a decline from last year’s peak.
Crude oil in New York reached a record in July before tumbling to $33.20 on Jan. 15 on expectations the global recession will sap demand for fuels. Oil has since more than doubled to $70.70 a barrel in New York. Brent oil rose to an all-time high of $147.50 on July 11, 2008.
“The Elliott-Wave picture pretty much assures us that there will be no additional waves of advance to extend the ‘peak oil’ mania,” Prechter said in the report. “On the contrary, if five waves are complete from the early 1990s, oil should fall to between $4 and $10 a barrel, which, needless to say, supports our deflationary outlook.”
Commodities may have peaked last year and the next major top may be in the late 2030s, Prechter said in the report, citing wave and cycle analyst Harry Dent, who showed a 29-year cycle in commodities, with past peaks in 1920, 1951, 1980 and 2008.
...***Last week, a Chatham House research fellow forecast that crude oil may reach $200 a barrel in the next five years as the global economy recovers from the recession and demand for the fuel increases.*** [[[ Prechter does not believe there will be any economic recovery within the next five years. See http://www.youtube.com/watch?v=JLejfG460WQ and, even more, the video linked at this site: http://tinyurl.com/o88r7j ]]]
Crude supply will be tight when demand rebounds because national and international companies haven't spent enough on exploration and development, Professor Paul Stevens of the London-based research group said in an e-mailed statement.
(4 August 2009)
Sent in by EB reader William Tamblyn
Mexico Oil Production to Fall 4.9%, Drop Through 2012 (Update3)
Andres R. Martinez and Carlos Manuel Rodriguez, Bloomberg.com
Mexico’s oil production may fall 4.9 percent next year as the nation faces the greatest “fiscal shock” in 30 years, Finance Minister Agustin Carstens told a Senate committee today.
Lower output is costing the nation as much as 300 billion pesos ($23.05 billion) in lost sales annually and may create a deficit in the federal budget next year, Carstens said. Oil revenue funded 38 percent of the government’s budget last year.
Mexico’s economy, the second-largest in Latin America, may have shrunk as much as 10.4 percent in the second quarter as remittances, foreign direct investment and exports fell, according to a government report last month. Standard & Poor’s in May placed Mexico’s credit rating on negative outlook as the government struggles to narrow its fiscal deficit.
“We are going to face a huge hurdle to pass a budget that maintains the stimulus with less government revenue,” Carstens said.
State-owned oil company Petroleos Mexicanos on July 30 cut its production forecast to 2.65 million barrels a day for this year, from an earlier estimate of as much as 2.8 million. Carstens said Pemex may pump 2.5 million barrels a day next year and output would keep falling through 2012.
Output is slumping as production at Cantarell, the company’s largest field, drops at a rate twice as fast as forecast by Pemex. Last year, production slumped at the fastest rate since 1942.
(4 August 2009)
Also sent in by EB reader William Tamblyn