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When Will the Oil Price Pop?
Jim Kingsdale
Six month ago – when the world economy looked significantly rosier – I posted an analysis of projected supply and demand for oil going forward to 2015. The analysis was based on the assumption of continued demand growth, continuing decline of old oil fields and expected new production from announced oil megaprojects. I adjusted the magaprojects estimates for delays and I concluded that: “if these estimates are at all closely correlated with reality we should expect oil markets to be tighter than at present through 2012 followed by even more need for demand destruction from 2013 through 2015.”
I also offered an alternative scenario that included an unadjusted but smoothed curve of the Wikipedia expected annual megaproject supply which showed very substantial new projects coming on stream in 2008 and 2009. Based on this scenario for new oil supplies I concluded: “These “unadjusted” numbers show ample supply of oil through 2009 followed by shortfalls in 2010 and very important shortfalls starting in 2011 – possibly even catastrophic shortfalls in 2012 and thereafter if decline rates are more severe than 4.5%.”
I also showed an alternative model using an adjusted smoothed version of the megaprojects curve to account for likely delays in project startups, delays in reaching peak production, and the addition of new small projects in the out years. Based on such adjustments I concluded: “There will be unremitting stress in the oil price going forward and prices will escalate after 2010.”
In actual fact, the 2008 – 2009 economic debacle is expected to reduce global oil demand by millions of barrels per day (thus increasing global spare oil production capacity) and to simultaneously defer many megaprojects and smaller production plans further into the future. So it now seems appropriate to look at the changed landscape and prepare an updated estimate for oil supply, demand, and price through 2015.
(8 March 2009)
This post by Jim Kingsdale was praised by DownSouth and others in TOD’s Drumbeat for March 8.
Fire or Ice? The role of peak fossil fuels in climate change scenarios
Ugo Bardi, The Oil Drum: Europe
Will the world end in fire or in ice? That is, are we going to be hit by global warming or are we going to freeze because of lack of fossil fuels? We don’t know yet, but it is starting to appear clear that geology is placing a major constraint on anthropogenic CO2 emissions and, therefore, on global warming. Here, I present a brief summary of some of the recent papers that have appeared on the subject.
Until recently, most simulations of future climate have been run without taking into account “peaking” of the major fossil fuels. Concepts such as “peak oil” are not discussed, and not even mentioned, in the reports of the International Panel on Climate Change (IPCC). But, with peak oil coming, or already arrived, the subject is starting to appear in scientific journals, blogs, and conferences. In a previous post , I reported about the “Mission Earth” seminar held in Zurich in 2009 where climatologists and depletion experts gathered to exchange views. Here, I present a short review of the status of the field. There is a very small number of papers published in scientific journals on this subject and I think this summary includes them all. I also tried to include a number of less formal studies published on the web or presented at conferences.
Probably the first to raise the issue were Anders Sivertsson , Kjell Aleklett and Colin Campbell who, already in 2003, wrote in “The New Scientist” a paper titled “Not enough oil for climate change”. They criticized the IPCC scenarios for being overoptimistic in terms of oil and gas reserves. This early paper considered only oil and gas and didn’t attempt to calculate the future concentrations of CO2.
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(5 March 2009)
Peak oil, peak coal and a peek at the future
Harry Fuller, GreenTech Pastures, ZD Net
Some scientists are now calling for a serious attempt to measure the known coal and oil reserves. There is evidence that we’ve already passed peak oil, nearly one half of all oil explorationcompanies apparently agree with that conclusion. Meanwhile, coal mining is also facing a cliff and falling production.
There are politics–surprise, surprise–involved in most current coal and oil reserve estimates. Thus they’re not based on fact but on supposition and political position, say the scientists. Worse yet, techniques for calculating reserves are thirty years old. Remember how all those brillaint investment bankers were making huge assest growth for years, until they didn’t? Sure, they lied to the world. Well, sadly, the same thing has been going on with fossil fuels. And without reliable data we don’t really know how bad off we’re going to be…or when. And how quickly oil and coal prices could rise in coming decades if supplies do run short.
Further, the lack of true data on fuel supply means that many long-term global warming projections have serious flaws because they are based on assumptions that there’llbe plenty of energy even if most of it is just more of the same. What if some countries have to turn to burning wood instread of coal, dam rivers rather than burn coal or fuel oil?
(7 March 2009)
