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Prime Minister of France: Oil production can only decline

Matthieu Auzannau, Oil Man, Le Monde blog

Rough translation from the French of the original:

“In 2009 we reached peak production of petroleum. The production can now only decline, while even though the growth of the global economy has rebounded to 4.5%,” said French Prime Minister Francois Fillon on April 5 before the National Assembly. He was responding to a question on the current energy prices asked by the Socialist deputy Francois Brottes.

… Never in France has a member of the executive branch had made such a statement.

… François Hollande, the Socialist candidate for president, was previously the only French political figure of the first order to have publicly worried about the risks posed by a potential peak in world oil production.

Among the other leaders of the political class, only Yves Cochet, a candidate for nomination in Europe ecology – the Greens for the presidency and former Minister of Environment in the government of Lionel Jospin, tried for years to draw attention to the issue of ‘peak oil’.

Original French:

Fillon : la production de pétrole “ne peut que décroître” !

“Nous avons, en 2009, atteint le pic de production en matière de pétrole. La production ne peut maintenant que décroître, alors même que la croissance de l’économie mondiale a retrouvé un train de 4,5 %” , a déclaré le premier ministre François Fillon le 5 avril devant l’Assemblée nationale. Il répondait à une question d’actualité sur les prix de l’énergie posée par le député socialiste François Brottes.

… Jamais en France un membre de l’exécutif n’avait émis un tel verdict.

… François Hollande, candidat à l’investiture socialiste pour l’élection présidentielle, était jusqu’ici l’unique figure politique française de tout premier plan à s’être publiquement inquiétée des risques engendrés par un potentiel pic de la production mondiale de pétrole.

Parmi les autres ténors de la classe politique, seul Yves Cochet, candidat à l’investiture d’Europe écologie – les Verts pour la présidentielle et ancien ministre de l’environnement et de l’aménagement du territoire de Lionel Jospin, tente depuis des années d’attirer l’attention sur la question du ‘peak oil’.
(8 April 2011)
Matthieu Auzannau is an independent journalist and an ally of Energy Bulletin. If you use this information, be sure to credit him and link back to his original article. Or if you are in the media, get him to write for you! -BA

Libyan unrest sends oil prices soaring to $124 a barrel

Tom Bawden, Guardian
Oil has breached the $124-a-barrel mark for the first time since August 2008 after attacks on Libyan oil fields raised concerns about supply.

Brent crude surged by $1.05, or 1%, to $124.65 a barrel on Friday, while US crude jumped by 98 cents to $111.90, its highest level since September 2008.

The price rises continue as fears mount that unrest in the Middle East could spread at a time when demand is increasing on the back of strengthening economies in countries such as China and the US.
(8 April 2011)

Barclay oil analyst Amrita Sen answers your questions – Part one

Kiran Stacey, Financial Times
In this week’s readers’ Q&A session, Amrita Sen, oil analyst at Barclays Capital, answers your questions.

In the first of two posts, she discusses whether speculation is driving up the oil price, whether such an increase could trigger another recession and when “peak oil” might occur.

… Q: Are current high oil prices due to market fundamentals (high demand from China/India and stagnating production…) or is speculation the cause?
Lionel Badal

A: Very clearly, the former. More than anything, the growth in oil demand has been the single most dominant factor over the past 18 months.

… In a world where demand has resulted in the steady erosion of spare capacity, the loss of Libyan output and general unrest in the Middle East has added further volatility and anxiety in the market, putting further upward pressure on prices.

… Q: Saudi spare capacity is usually quoted in the 3m b/d range. Do you think this is an accurate sum or has it been inflated to assuage Opec and world oil market watchers?
Benjamin Dow

A: It would be fair to say that the current Saudi spare capacity is in the range of 3m b/d. We currently peg it at around 2.6m b/d. Of course, increasingly, with the global oil markets becoming reliant upon Saudi Arabia for supply-side balancing, questions about the sustainability of production and its ability to invest in new capacity have been raised regularly.

Sceptics have argued that Saudi Arabia has very high rates of decline in existing fields, particularly given its historical reliance on the enormous and unparalleled Ghawar field. But thus far, Saudi Arabia has been able to continue to provide the main shock absorber with the global oil system.
(8 April 2011)

Rush to Use Crops as Fuel Raises Food Prices and Hunger Fears

Elisabeth Rosenthal, New York Times
Each year, an ever larger portion of the world’s crops — cassava and corn, sugar and palm oil — is being diverted for biofuels as developed countries pass laws mandating greater use of nonfossil fuels and as emerging powerhouses like China seek new sources of energy to keep their cars and industries running. Cassava is a relatively new entrant in the biofuel stream.

But with food prices rising sharply in recent months, many experts are calling on countries to scale back their headlong rush into green fuel development, arguing that the combination of ambitious biofuel targets and mediocre harvests of some crucial crops is contributing to high prices, hunger and political instability.

This year, the United Nations Food and Agriculture Organization reported that its index of food prices was the highest in its more than 20 years of existence. Prices rose 15 percent from October to January alone, potentially “throwing an additional 44 million people in low- and middle-income countries into poverty,” the World Bank said.

Soaring food prices have caused riots or contributed to political turmoil in a host of poor countries in recent months, including Algeria, Egypt and Bangladesh …
(6 April 2011)

The Gas Age

Andrew C. Revkin, Dot Earth (blog), New York Times
The Energy Information Administration has released “ World Shale Gas Resources,” an important commissioned report providing an assessment of how much natural gas is locked in shale deposits in 14 regions around the world. (Here’s its overview of shale gas in the United States.) Here’s a map of the surveyed regions:

The report includes some pretty remarkable numbers from countries that currently have limited domestic gas options, including China and quite a few western European nations that have been held somewhat hostage by Russia. Its publication comes in sync with a disturbing article in The Times noting how much crop production, including tropical staples such as cassava, is being diverted to making biofuels.
(7 April 2011)