Peak Oil – Nov 9

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President Bush a peak oiler?
President George W. Bush, The White House (press conference transcript)

Question: “Mr. President, with oil approaching $100 a barrel, are you concerned that your hard words for Iran on its nuclear program are helping drive up oil prices, which can end up hurting the U.S. economy?”

Bush: “No. I believe oil prices are going up because the demand for oil outstrips the supply for oil. Oil is going up because developing countries still use a lot of oil. Oil is going up because we use too much oil, and the capacity to replace reserves is dwindling. That’s why the price of oil is going up.”
(9 November 2007)
Emphasis added.

Macklin says: “What a pitch for the rest or any of the MSM [mainstream media] to pick up on. Anyone out there? Knock, knock.”

Oil: running out for good this time
David Strahan, Last Oil Crash
With the markets hypnotised by the approach of $100-a-barrel oil, analysts are ready to point the finger at all the usual suspects: speculators, the Opec bogeyman, the weak dollar, soaring consumption in China and India and geopolitical tensions.

All play a part – but the real cause is altogether less palatable. The world is running short of oil, and this time it is likely to be permanent.

For all their power and profits, the world’s biggest oil companies are in trouble. These days they struggle to replace the oil they produce each year with fresh discoveries – but it’s not for lack of trying. A recent study by analysts John S Herold showed that the world’s 230 biggest oil companies raised their ‘upstream spending’ – on exploration and development – by 45% to more than $400bn last year, but that oil and gas reserves inched up by just 2%. And many companies cannot even sustain their current levels of production. Output at BP and Shell is lower today than in early 2005.

None of this should come as a surprise: much of the oil-producing world is what they politely call ‘mature’. After 150 years of rising oil production, in which the biggest and most productive fields were exploited first, the industry is now having to run flat out just to stand still. According to the International Energy Agency, for every $4 invested in the upstream business, only $1 goes towards satisfying growing demand, and $3 goes to make up for the declining output of existing fields.
(9 November 2007)
First published in the Evening Standard, 9 November 2007

Also at This is Money.

Big Oil CEOs Point To Constraints On Supply Growth
Dow Jones
Pointing to a variety of political and technological constraints on energy investment, chief executives at two oil giants Thursday highlighted systemic limitations on the growth of the supply of oil, implying that there will be high oil prices for at least the medium term.

BP PLC (BP) Chief Executive Tony Hayward predicted that medium-term oil prices will be in the $60-$80 range. “For the medium term, it’s very clear the era of cheap energy is behind us,” the recently installed CEO said in Houston, adding that it isn’t clear how long the medium term will last.

ConocoPhillips (COP) Chief Executive James Mulva had earlier told a New York financial conference that he doubted that world oil producers would be able to meet forecast long-term energy demand growth. The International Energy Agency, the energy watchdog for western economies, has projected 2030 world oil demand of 116 million barrels a day. But Mulva said he doesn’t believe oil supply will ever exceed 100 million barrels a day. He didn’t offer a price forecast.

“Demand will be going up, but it will be constrained by supply,” Mulva said. ” I don’t think we are going to see the supply going over 100 million barrels a day and the reason is: Where is all that going to come from?”

…Overall, Hayward said “about half” the world’s oil has been recovered, but he implied that significant improvement is possible on a broader scale.
(8 November 2007)
Peak oilers predict that peak oil production will occur approximately when about holf of the world’s oil has been recovered. -BA

Truth in reserve
Jeremy Leggett, Guardian
The world’s supplies of oil are running out, experts around the world are agreeing. But is Britain listening?
—
As the oil price edges closer to its all-time, inflation-adjusted high, we are finally beginning to see worries about peak oil join the long list of reasons for the rise. With good reason.

Sadad al-Husseini is a man who should know all about the problems of lifting supply to meet rising demand. For many years, until 2005, he presided over the largest reserves in the world as head of exploration and production for Saudi Aramco. Now he is saying global oil production will never rise much above the current 84 million barrels a day. Speaking at the oil and money conference in London last week, he said global reserves are inflated by fully 300 billion barrels and that Saudi Arabia might be able to hit 12 million barrels a day (mbd) (up from around 10) but not much more. The Saudis would need to to get to 20 mbd if the world is to hit the International Energy Agency’s forecast of 116 mbd of global demand by 2030.

At the same event, Libya’s national oil corporation chairman, Shokri Ghanem, said:

“there is a real problem – that supply may not be possible to increase beyond a certain level, say around 100 million barrels. The reason is, in some countries production is going down and we are not discovering any more of those huge oil wells that we used to discover in the 1960s or the 1950s.”

(9 November 2007)

Peak oil at Philadelphia forum for officials
Richard Pearsall, Courier-Post
Philadelphia – With oil approaching $100 per barrel, a prediction the price could double within a year grabbed the attention of local officials gathered here to learn how to cope with energy problems.

“We actually do face the possibility of $200 a barrel oil within the next year,” author Daniel Lerch told the forum on “climate change and energy” convened by the Delaware Valley Regional Planning Commission.

Global warming has begun to sink into the public consciousness, Lerch said.

“There has been a definite surge of interest in climate change,” he said.

But the fragility of the world’s oil supply and the imminence of the phenomenon called “peak oil” is “not as widely understood,” he said.

“Peak oil” is the point at which the planet’s supply maxes out and irreversibly begins to shrink.

It’s the point where the interruptions in supply we have come to fear from crises in, say, Iraq or Iran, become permanent.

“An increasing number of petroleum analysts predict it happening by 2010,” Lerch contends in his book, “Post Carbon Cities,” and as that date approaches, the uncertainties surrounding the energy picture and, therefore, the volatility of pricing, will only increase.

“We’re talking about climate change that’s in the here and now, not 40 years out in the future,” Lerch said Thursday. “The same change in heart needs to happen with oil.”

To illustrate the “uncertainties” of oil’s future, Lerch cited recent studies by the U.S. Energy Information Administration that predicted the likely price of a barrel of oil would be $50 in 2007, and placed the “theoretical maximum” at $60.

Lerch, an analyst with the California-based Post Carbon Institute, ticked off a number of problems he sees — “easy oil” has already peaked; “unconventional oil” is becoming tougher to find; the remaining oil “isn’t all ours to buy;” and OPEC can’t provide a cushion any more — and said it all adds up to “higher prices and price volatility.”

Andrew Levecchia, a senior planner for the Camden County Improvement Authority, said the idea of oil prices rising even faster than they have been is alarming.

He said his purpose in attending the forum, which also featured a presentation on the federal Energy Star program and practical steps governments can take to become more energy efficient, was two-fold.

“We want to lead by example,” Levecchia said of the county, “and get our house in order first. We also want to bring these ideas back to the municipalities.”
(9 November 2007)