Insight and inspiration in turbulent times.
The last “super giant” oilfield (more than 10 billion barrels) was discovered 40 years ago; the last American refinery was built 25 years ago; each successive American “driving season” guzzles more gas than the last.
Predicting another oil shock, analysts John Westwood Ltd., Canterbury, England, said depleting oil reserves, coupled with growing energy demand, will result in sustained oil price increases, greater capital investment in natural gas production, drastic conservation regulations, and fevered development of renewable energy substitutes funded by “windfall” profits.
For the past several years, we have been publishing U.S. natural gas production surveys of publicly traded companies. The bottom-line story has remained essentially the same throughout this entire time: U.S. natural gas production is heading firmly downwards, despite a massive increase in drilling activity.
“China’s growing weight in world consumption virtually assures a heavy long-term impact on energy prices, trade, and investment. In a decade, China has gone from self-sufficiency to being the most dynamic factor in the world oil market and one of the main elements in today’s $40-plus per barrel price,” said the report by Daniel Yergin and Scott Roberts.
Where energy is concerned, much has changed since 1980. Unfortunately, much also remains the same.
There is a growing consensus that the crucial turning point in oil output will probably occur in the second half of this decade, in or around 2007. It will be an energy crisis that will dwarf anything we have ever experienced.
In the April 2004 issue of the magazine the Middle East I found a statement that Vice- President Dick Cheney had made in a speech at the London Institute of Petroleum Autumn lunch in 1999 when he was Chairman of Halliburton. A key passage from his speech was: “That means by 2010 we will need on the order of an additional fifty million barrels a day.”
World oil demand will rise the most since 1988 as economic growth accelerates and consumption surges in China, said the International Energy Agency, an adviser to 26 industrialized countries on oil policy.
NEW YORK — Coal supplies at U.S. power plants are at their lowest levels in more than three years, sparking concern of possible blackouts this summer when demand is heavy for electricity to power air conditioners.
Higher prices show that our insatiable demand for gasoline is catching up with our willingness to produce it.
Producers currently discover about one barrel of “new oil” for every four barrels that are consumed worldwide, and there have been no large oil or gas discoveries in recent years. Anywhere. It gets worse. The world’s largest oilfields have been producing for many decades and now require heroic measures (such as pumping in seawater or steam) to coax the oil from the ground.
Crises multiply and grow, and still the petroleum bags are just dispensed as though they were falling autumn leaves doing no harm. We are now in the fall before the big autumn storm. Not many will make it through the coming “winter” of our own making.
