Click on the headline (link) for the full text.
Many more articles are available through the Energy Bulletin homepage
Peak-Oilers Put Money Where Mouths Are
Jeffrey Ball, Wall Street Journal (Enviromental Capital blog)
The peak-oil debate no longer is a matter just of the planet’s future. Now it’s the subject of a one-sided $100,000 bet.
Reveling in the role of the fly tweaking the elephant, a group of peak-oil proponents has challenged prominent oil-industry consultancy Cambridge Energy Research Associates to a not-so-friendly wager.
If CERA proves correct in its prediction that global oil production will rise by 20 million barrels per day by 2017, then the challengers, the Association for the Study of Peak Oil & Gas, will hand CERA a check for $100,000 nine years hence. If oil production falls short of CERA’s projection, as the group known as ASPO projects, ASPO will get the bragging rights and the check – and donate the money to charity.
CERA, the Boston-based company headed by prominent consultant Daniel Yergin, forecasts that global oil-production capacity could rise to 112 million barrels per day in 2017. Today, according to CERA, capacity is about 91 million barrels.
“That’s a vision in search of reality,” Steve Andrews, co-founder of ASPO’s U.S. branch, said in a statement it sent out yesterday. Who knows whether ASPO’s finances will peak before then. But along with its press release, ASPO sent a copy of what it said is a bank letter of credit guaranteeing its $100,000 bet.
ASPO believes the peak in global oil production is, in its words, “near.” If true, that wouldn’t mean oil production is about to stop. It would mean that the era of cheap oil is over for good, with production entering a long-term decline. The oil industry dismisses the peak-oil argument as, fundamentally, Luddite. It concedes oil is getting harder to find, and that the world will need other sources of energy to meet growing demand. But it argues that peak-oil predictions have been made many times before, only to be proven wrong when technology rooted out new troves of black gold.
ASPO pumped out its press release just as CERA is gearing up for its big annual conference next week in Houston. The event typically draws some of the oil industry’s biggest luminaries. A CERA spokeswoman declined to comment. Randy Udall, also a co-founder of ASPO’s U.S. chapter, said he wasn’t planning on attending the CERA confab. “I don’t know that we have the entry fee,” he said. “It’s a high-dollar deal.”
(7 February 2008)
Links and images at original. The Wall Street Journal is now officially peak-oil aware, moving far ahead of the New York Times, Washington Post and Los Angeles Times which continue to be oblivious.
The WSJ’s energy blog has now mutated:
No, your computer isn’t misfiring. Welcome to a new Wall Street Journal blog, Environmental Capital. It replaces the Journal’s Energy Roundup blog. Environmental Capital will continue Energy Roundup’s tradition of tracking daily energy news. And it will go further, analyzing how the energy world, and all of business, is adapting to mounting concern about the planet.
-BA
BP to ‘put lights out’ on North Sea
David Strahan, Last Oil Shock
BP chief executive Tony Hayward stressed the company’s commitment to the North Sea during its results press conference yesterday, saying it would continue to produce there “until we put the lights out”.
Asked by lastoilshock.com when that would be, Mr Hayward said production would continue for at least 15-20 years, but that this would depend on the tax regime. The province faces declining production and rising costs, he said, so “the fiscal structure needs to continue to develop to ensure that all of the marginal barrels are developed”.
Asked whether he agreed with Shell chief executive Jeroen van der Veer’s judgment that “easy oil” would peak by 2015, Mr Hayward said “The question I always have in my mind is what’s conventional and what’s non-conventional. My personal view is that peak oil will occur more likely driven by demand than supply, and I don’t expect that to occur in 2015”.
(6 February 2008)
Why the price of ‘peak oil’ is famine
Ambrose Evans-Pritchard, Telegraph (UK)
Vulnerable regions of the world face the risk of famine over the next three years as rising energy costs spill over into a food crunch, according to US investment bank Goldman Sachs.
“We’ve never been at a point in commodities where we are today,” said Jeff Currie, the bank’s commodity chief and closely watched oil guru.
Global oil output has been stagnant for four years, failing to keep up with rampant demand from Asia and the Mid-East. China’s imports rose 14pc last year. Biofuels from grain, oil seed and sugar are plugging the gap, but drawing away food supplies at a time when the world is adding more than 70m mouths to feed a year.
“Markets are as tight as a drum and now the US has hit the stimulus button,” said Mr Currie in his 2008 outlook. “We have never seen this before when commodity prices were already at record highs. Over the next 18 to 36 months we are probably going into crisis mode across the commodity complex.
“The key is going to be agriculture. China is terrified of the current situation. It has real physical shortages,” he said, referencing China still having memories of starvation in the 1960s seared in its collective mind.
(7 February 2008)
Peak oil rapidly approaching warns oil analyst
Jeff Florian, AME Info Fn (“Middle East Finance and Economy”)
One of the hottest topics in the energy industry is the debate about peak oil, which refers to the point in time when global oil production goes into terminal decline. Estimates vary widely as to when peak oil will occur. The US and UK officially say peak oil will not happen before 2030. Others, like oil expert author David Strahan, believe it will happen much sooner.
Speaking at the recent World Energy Summit in Abu Dhabi, Strahan said the world is rapidly approaching peak oil, which he estimates will occur around 2017, but no later than 2020.
The consequences of peak oil will be a severe drop in the availability of conventional oil, a spike in oil prices, and a subsequent financial and social crisis that would far exceed the current shockwaves that are being felt by the sub-prime credit crunch, he argued.
Strahan offered a dizzying array of facts and figures to support his estimates about peak oil. He strongly believes that the world is well-explored for oil
(X February 2008)
‘Dean of Oil Analysts’ Maxwell (Part 4 of 4): Oil Crisis Will Lead to 10-Year Financial & Political Crisis
Energy Tech Stocks
A growing chorus of voices is screaming for the United States to undertake a Manhattan Project-type program to wean America off its oil dependency. But as Charles T. Maxwell, the “dean” of Wall Street’s energy analysts, looks into the future, he deeply fears that Washington won’t do anything to head off the oil crisis he sees rapidly developing starting in 2010. He says this will make the financial crisis he fears even worse. Also, because Washington will be seen by angry voters (who will be paying $12 to $15 for a gallon a gas) as the cause of their “Nightmare on Main Street,” Maxwell sees the American political system being shaken to its roots.
Princeton and Oxford-educated Maxwell believes that if the Democrats are in power, their core constituencies – farmers, workers and intellectuals – will be ranged against one another, resulting in an impasse. If the Republicans are in power, he expects whatever “solution” they come up with to be politically untenable because it will be premised on people with money continuing to consume as before, with the have-nots expected to do without.
Seeing no chance of a timely political response to America’s looming oil calamity, Maxwell, senior energy analyst at Weeden & Co., expects an oil-induced financial crisis to start somewhere in the 2010 to 2015 timeframe. He said that, unlike the recession the U.S. appears to be in today, “This will not be six months of hell and then we come out of it.” Rather, Maxwell expects this financial crisis to last at least 10 or 12 years, as the world goes through a prolonged period of price-induced rationing (eg, oil up to $300 a barrel and U.S. pump prices up to $15 a gallon), while waiting for new technologies that can wean nations off their oil dependency to take hold in the marketplace. (It will take time to change over the world’s one billion or so oil-consuming cars and trucks.)
As this combined oil and financial crisis worsens, Maxwell would not be surprised if the U.S. government started functioning the way it did in World War II, when the democratic dialogue was often put on hold so that unilateral decisions could be made by people given special powers.
(7 February 2008)
The previous three segments of the interview are online:
Part 1
Part 2
Part 3
Desperately seeking energy
Toby Frost, Lincoln Journal (MA)
“How many of you have seen the Al Gore movie, ‘An Inconvenient Truth?’”
That question was asked last week, in the Tarbell Room of the library, by Richard Lawrence, director and co-founder of ASPO-USA, the U.S. branch of the Association for the Study of Peak Oil and Gas.
Almost every hand shot up.
Probably 30 Lincolnites had gathered that night to hear Lawrence speak about peak oil. As the show of hands revealed, most of us knew: that is the point at which the earth’s supply of oil and gas reaches (or perhaps has reached) its peak. It’s all downhill from there.
Another way of putting it is that if we haven’t already reached the tipping point, we’re just about to.
(6 February 2008)
UPDATED (Feb 9) Author October Cullum Frost (aka Toby Frost) informs us that he writes for the newspaper in Lincoln, Massachusetts, not Lincoln, Nebraska. Sorry! -BA
