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Peak Oil
What keeps driving oil prices higher? (Q and As)
John W. Schoen, MSNBC
With oil prices racing toward $70 a barrel, Answer Desk readers want to know what it will take to send prices lower again. Wyatt in Florida wants to know just how much more oil is out there. And Mark in San Francisco can’t see why oil speculators are allowed to bid up prices — and ruin life for the rest of us.
…Optimists (mainly those in the oil industry) will tell you there’s plenty of oil out there for at least another few decades — if not longer. Pessimists, using some fairly sophisticated analysis of oil reserve data, believe that the relentless rise in oil prices is the direct result of the world’s demand for oil close to exceeding supply. Some believe we’ve already reached that point.
Who’s right? You have to start with the fact that the total amount of oil underground is really unknowable. Even with the technology available to today’s “Nintendo geologists” — who can “see” underground by displaying 3-D seismic data on room-sized screens — identifying oil deposits is not an exact science.
(15 August 2005)
One of the best energy commentators in the mainstream media. -BA
Global: Beneath the Surface
Steven Roach, Morgan Stanley
…I don’t know where oil prices are going. But I do feel strongly that an important macro threshold has now been breached — one that adds unmistakable tension to the world economy’s greatest imbalances. At the current level of oil prices, I suspect one of two things will happen — either the over-extended American consumer will finally cave or the long-awaited US current account adjustment will finally unfold. Courtesy of a full-blown energy shock, the venting of global imbalances can no longer be deferred indefinitely. If consumers remain unflinching in the face of sky-high oil prices, a plunging saving rate will push an already outsize current account deficit to the flash point.
As always, duration matters. If oil prices fall back quickly and sharply, all will be forgotten and the consequences will be minimal. Unfortunately, that’s a bet the financial market consensus has been making for far too long. All this points to what could be the biggest macro call that any of us will have to make for a long time — the capitulation of the unflinching American consumer. Needless to say, this would have profound implications for the rest of the global economy — largely a US-centric world that is utterly lacking in support from autonomous domestic consumption.
(15 August 2005)
Why is petrocollspse imminent?
Andrew McKillop, via NewsGateway
I intend to map out the reasons why we can be growingly confident that so-called “Petrocollapse” will start from 2006. In some ways, and in rather ‘gauche’ or ingenuous fashion I tried to do it, to evoke Petrocollapse, in various article for the French press and newspapers, magazines, journals, etc.- but rarely were these articles published.
…The real bottom line is this. Late 2005, on cyclic analysis of various sorts, is already Triple Witched ! There are so many elements and strands to the replies which come from ‘Why now ?’. The strands can be separated and discussed but this is only a presentation method, they should better be appreciated, like Globalization, in a global way. So I will end by saying that Late 2005 is a great time for Petrocollapse to start up.
(6 August 2005)
McKillop has written extensively on Peak Oil. He is general editor of The Final Energy Crisis from Pluto Books.
Peak Oil in Portland, Oregon
Portland Peak Oil
We’re a grassroots group of concerned local citizens, from different backgrounds, with different interests, who’ve separately become aware of the looming crisis caused by the peaking of world oil supplies. We’ve come together to try to:
* Develop individual and collective strategies to cope with this crisis
* Create awareness in the Portland community about Peak Oil
* Influence policies of local government to help mitigate the crisis
* Serve as a community resource as the crisis becomes more severe
The Portland Peak Oil group generates a full month of events, from speakers and workshops to outreach and preparedness team meetings and film night. We meet the second Wednesday night of each month just like always for our general meeting, which is an opportunity to make introductions, build community, share announcements and news, and strategize and discuss. All PPO meetings and events are free and everyone is invited.
Members have been on public cable access shows in Portland and one member will be interviewed by Thom Hartmann on his morning show on Air America tomorrow [Aug 16] morning
Our web site is a work in progress, but for the time being, we’ve posted a calendar, a primer on peak oil, an extensive resources section, and information on our public outreach efforts. Please visit us at www.portlandpeakoil.org.
(16 August 2005)
The Week in Sustainable Vehicles
Mike Millikin, WorldChanging
Crude oil prices crested $67 a barrel by Friday on this week, driven by a combination of concerns, including the IEA’s latest Oil Market Report in which the international agency identified a drop in the growth in non-OPEC production. That, in turn, puts more burden on OPEC to meet an ongoing growth in demand. (GCC)
Prices have risen 53% so far this year, and some analysts are speculating that oil will reach $70 a barrel by the end of the month.
That puts it within close range of the high real prices of some $80 per barrel (adjusted to 2005 dollars) reached during 1980 in the oil crisis that followed the Iranian revolution in 1979.
The “P” word—peaking—is beginning to appear with some greater frequency.
“There are concerns that supply is peaking,” said Kyle Cooper, an analyst with Citigroup Inc. in Houston. “Demand is still good and we are having a number of refinery hiccups. There are refinery problems every year but it does appear that they are occurring more frequently than usual.” (Bloomberg)
(14 August 2005)
The Oil Price to Be Scared Of
Jad Mouawad, NY Times
Once upon a time, not too long ago, the prospect of crude-oil futures hitting $50 a barrel sent waves of anxiety over consumers, business executives and politicians, evoking the specter of gasoline rationing, not to mention a global recession and general economic mayhem.
Today, the $50 mark is a mere dot in the rear-view mirror and the economy keeps growing at a healthy clip. Is there another benchmark – a new number that everyone is scared of?
For now, the number to watch is $86.
In early 1981, when the Iraq-Iran war caused an oil shock, a barrel of oil cost the equivalent of $86 in today’s dollars. That number still seems a long way away, and OPEC is promising to pump itself dry to meet demand.
But consider this: it has taken less than eight months for oil prices to jump by $20 – from $46 to $66. Over the last year, oil prices have increased by 54 percent. In the past week alone, futures on the New York Mercantile Exchange rose to a record – $67.10 on Friday – the highest since crude oil began trading on the exchange in 1983.
At this rate, oil prices might hit $86 a barrel sometime next spring.
Last month, Goldman Sachs predicted that prices could reach $80 a barrel if a hurricane were to destroy production platforms and pipelines in the Gulf of Mexico, which accounts for a quarter of American production.
And other worries abound, including growing tension between Iran and the West, the possibility of more pipeline bombings in Iraq, civil unrest in Nigeria, oil worker strikes in Venezuela and, most devastating, the fear of an attack on Saudi Arabia’s oil industry.
While the economy stayed upright at $50 a barrel, few economists are predicting the same for $80 and up.
Here is another number to worry about. Back in March, Arjun Murti, an analyst at Goldman Sachs, made a bold prediction: oil markets had entered a “super spike” period, he said, and if supplies were interrupted, the price of a barrel of oil could rise to – take a breath – $105.
(14 August 2005)
Energy myths and illusions
David Howell, Japan Times
…Energy sources available to the human race are unlimited, however much we use. Nuclear energy is all about politics. But it can provide enough electricity to warm and light the whole planet forever, and even to colonize space as well. Fusion, now being explored, seeks in effect to encase in a bottle the entire energy equivalent of the sun. Even traditional energy resources, like coal and oil and gas, exist in quantities so vast that it would take centuries for the world to run out, if ever, despite the repeated claims if some scientists that we have “reached the peak,” or are about to reach it.
David Howell is a former British Cabinet minister and former chairman of the Commons Foreign Affairs Committee. He is now a member of the House of Lords.
(15 August 2005)
For a mixture of myths and misinformation, this column would be hard to beat. Howell was UK Secretary of State for Energy (79-81) and Transport (81-83) under Margaret Thatcher. It’s a chilling thought that someone with such views should have risen so high. (Let it be said that otherwise he’s an intelligent and articulate writer.) More writings by Howell are available on his website. -BA
