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Oil prices and the GCC: Could the region be stoking oil prices?
Mushtaq Khan, CPI Financial
With constrained supply and growing demand, the exportable surplus from the GCC has fallen for the first time and this appears to be unavoidable, rather than intentional. Record oil prices are no longer driving GCC growth, but GCC growth may be driving up oil prices
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… We think underlying fundamentals of global supply and demand, and the resulting outlook, are driving the persistent increase in oil prices, rather than pure speculation.
The specific case of the oil-surplus GCC shows that domestic demand growth has exceeded supply growth, and as a result the exportable surplus of oil has fallen in 2007. With record economic growth reflected in rising energy demand, the shrinking exportable surplus is likely to stoke oil prices. Hence, having once been the swing producer of oil, the GCC may no longer be able to play a role in rectifying the global imbalance.
… Despite rising oil reserves, the large OPEC producers have done little to increase production capacity. We do not think this is intentional, as it undermines the GCC’s special relationship with the US; triggers global resentment; and could accelerate the search for alternative fuels. In our view, analysts have not tracked production and refining capacities as closely as they should; perhaps the reluctance of the GCC to discuss their oil sectors is partially responsible. Now that the price of oil has become unreasonable, supply details are required to settle the market.
Mushtaq Khan is an economist at Citi in London
(28 September 2008)
The Export Land Model (ELM) again. -BA
Roscoe Bartlett – one of Slate’s 80 “silver lions”
Slate
Welcome to the “80 Over 80,” Slate’s first-ever list of America’s silver lions: fourscore elder statesmen, business leaders, and cultural icons who have remained influential into their ninth decade and beyond. We’ve ranked these still-twinkling stars according to their power and importance, with extra credit given for energetic achievements post-80 and for being really, really, really old. (We’re looking at you, Studs Terkel.)
# 56
Roscoe Bartlett
82 years old
Bio:
United States representative from Maryland; Republican. Bartlett is an advocate for reducing dependency on fossil fuels and the only pro-life member of the Maryland delegration.
What have you done for me post-80?
– Serves as a member of three House committees: science, small businesses, and armed services
– Voted against the Military Commissions Act of 2006, which suspends habeas corpus and allows “enemy combatants” to be detained without trial – one of only seven House Republicans to do so.
(September 2008)
The tank isn’t empty
Steven Martinovich, Enter Stage Right
Review of The Myth of the Oil Crisis
Overcoming the Challenges of Depletion, Geopolitics, and Global Warming
By Robin D. Mills
It is taken as an article of faith, thanks largely to a decades old prediction made by M. King Hubbert on American oil production, that the world is in imminent danger of running out of oil. Peak production, the day when oil production begins its irreversible slide, may be less than a decade away, say some experts, and the world economy could collapse overnight in response.
Except that isn’t the truth, argues Robin D. Mills in The Myth of the Oil Crisis: Overcoming the Challenges of Depletion, Geopolitics, and Global Warming. He believes that the world is in little danger of running out of oil, that the world has enough conventional and unconventional sources of oil to last it many decades – even centuries. The peak oil arguments are based on faulty logic and science and assumptions which aren’t grounded in reality.
… Mills, a petroleum economics manager for the Emirates National Oil Company in Dubai, argues that peak oil advocates have long underestimated the amount of estimated and proven reserves and that exploration has largely keeping pace with production when necessary. The recent rise in oil prices doesn’t reflect scarcer resources but underinvestment on the supply side and global economic growth on the demand side.
To support his argument Mills carefully surveys the world’s oil producers and analyzes their past, present and predicted future output. Unlike peak oil advocates, Mills generally takes a guardedly optimistic view and argues that many nations have untapped resources that haven’t been exploited for various reasons which include economics, technical and environmental, or that they simply aren’t needed at the moment.
… Peak oil advocates have long had the ear of the media and most of the space on book shelves despite the fact that their arguments seemed more grounded in ideology and bad science. Mills’ efforts to argue the other side of the debate are welcome and a forceful rejoinder to Hubbert and his many acolytes.
(29 September 2008)
Reviewer Matinovich writes as if peak oil were the accepted view. Has the peak oil movement been that successful?
Enter Stage Right is libertarian site. -BA
