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OPEC and Peak Oil
Alfred Cavallo, ASPO-USA
… Thus, the age of Peak Oil has finally arrived, although not as expected, with large disruptions in the world economy, but gradually, without fanfare, and without major financial upheaval. The fundamental cause is not primarily a limit on petroleum resources but the long term strategic considerations of OPEC, considerations that are completely missing in consumer nations. This development is as unexpected as it is welcome.
Al Cavallo, a physicist by training, wrote several papers on world oil production during the early 2000s when he was trying to understand how renewable energy might compete with cheap, abundant fossil fuels.
(28 April 2008)
We will never have cheap oil again
Hamish McRae, Independent
When this wave of higher oil prices subsides, is it going to be business as usual? After the oil shocks of the 1970s and early 1980s, the oil price came back down and we went pretty much back to our bad old ways.
But this time it feels different. It is true that all the attitudes that characterised previous surges in the oil price are evident now. There is the resentment against the oil companies at their profits. There is the cockiness of Opec …
… In the short-term there may well be some shading back in the price, but our economic structure is determined by long-term prices, not short, and the present surge seems likely to hasten us along the path to a less oil-dependent world.
Here’s why. It is that the balance of power between those two old warriors, supply and demand, has irrevocably shifted.
… You could say, over-simplifying grossly, that this “Nopec” oil is difficult-to-produce oil in politically easy places, whereas Opec oil is easy-to-produce oil in politically difficult places. As far as Nopec is concerned, many of the easier (ie, cheaper to produce) fields, such as on-shore US supplies, are in decline. The first generation of off-shore fields, including the North Sea, are in decline too.
Oil is still being found but the really big opportunities are in non-conventional sources, such as shale oil and tar sands, and these are expensive to exploit and may carry high environmental costs.
… So supply will remain tight for the foreseeable future. It may become very tight indeed if the “peak oil” advocates are right
(30 April 2008)
Climate change could fend off peak oil crisis
Gwynne Dyer, Georgia Straight (Canada)
… I predict that the price of oil will soon fall-a bit. So far, the economies of the “Brics” (Brazil, Russia, India and China) are still growing strongly, but the old industrialized economies are definitely heading into a recession, and they still consume most of the oil.
This recession has not actually been caused by the high oil price; the subprime-mortgage scam is to blame for that. But the recession is likely to drive the demand for oil down far enough to bring the price back down to $100 before long, or even to $85 to $90. Then in 2009 and 2010, as the “old rich” economies recover, it will go back up, probably to the $130 to $150 range.
… Even if the moment of “peak oil” is upon us, that would not mean the end of oil; it just means the end of sweet, light crude. The Alberta tar sands are profitable if the price of oil stays more than $40 a barrel; at $60, the far larger Venezuelan tar sands are a viable economic proposition; at $80, even the oil shales of the western U.S. are promising.
If the supply goes up, the price goes down. There may be little remaining possibility for increasing the supply of conventional oil, but that is not the case with unconventional oil, of which there is a massive potential supply. At a high environmental cost, of course: on average, the equivalent of two barrels of oil must be burned to liberate three barrels of oil from the Alberta tar sands.
In a world with a stable climate, ample unconventional oil supplies would bring the oil price down below $100 again, but that’s not the way it’s likely to play out. By 2015, global tolerance for any process that involves high emissions of greenhouse gases is likely to be very low. Indeed, there is likely to be a good deal of pressure to cut back on the consumption even of conventional oil.
(28 April 2008)
The Guardian: Science course
Duncan Graham-Rowe and others, Guardian
Multi-part series. From the section on oil (Black Gold):
… inevitably, [oil] will run out. Precisely when is a moot point, but some estimates say we have already reached peak oil production, while others say this won’t happen until about 2030. With demand for oil rising by roughly 2% a year, increasing by up to 47% by 2030, it’s hard not to assume we are driving into a major energy crisis. Desperate to keep productivity up, the oil industry is investing billions into extracting oil from more energy-intensive and costly sources such as tar sands and oil shales. Meanwhile, governments are investing in biofuel technologies, which make it possible to produce hydrocarbon fuels from feedstocks of crops such as rapeseed or maize. However, biofuels, although more sustainable than oil, are energy, land and water-intensive and carry a cost in terms of agricultural chemical pollution, and there is concern that it uses valuable land needed for producing food.
(30 April 2008)
