Insight and inspiration in turbulent times.
The party isn’t over — at least not yet. For the last year, relatively low oil prices have helped us all cope with the economic collapse. We’ve paid less for gasoline than we have for years. And businesses have paid less for running their factories, planes and product transportation. But last week we began hearing the music die down and waiters moving guests out the door.
One feature of this year’s ASPO conference that I most enjoyed was the contradiction amongst presentations. Marcio Mello gave an animated talk on Sunday night about the pre-salt formations off the coast of Brazil quoting that there are upwards of 500 billion barrels of oil available, an extravagant estimate that peak oilers are unused to hearing. Monday morning two talks on natural gas were juxtaposed in tone and content, one claiming that natural gas is the “American Treasure” and the other claiming that shale gas is marginally profitable, let alone a “treasure.”
Last week oil broke out of a months-long trading range and surged to $82 a barrel. For many of us who remember $140 oil from the summer of ’08 this might not sound impressive until you are reminded that every time oil (adjusted for inflation) broke $80 a barrel some sort of economic recession occurred.
Even as we’ve been going through years of hand-wringing about security of supply, and about how Russia was an unreliable gas supplier, it comes out the European gas buyers are themselves increasingly refusing to pay the price that underpins the security of their Russian supplies, and are breaking their contractual obligations towards Gazprom, making Europe, erm, a less reliable customer…
Where will you go when the sewers clog up? Where will you go when the porcelain finally cracks? Where will you go when the Toilet Duck quacks its last?
-Oilwatch Monthly October 2009
-A post-oil world gets less sci-fi by the day
-The Truth About Energy
-Global oil supply: Separating fact from fiction
Passing the world oil peak has had, and doubtless will continue to have, relatively little impact on the long-term price of gasoline. The economic implications of getting through the first half of the Oil Age have been much more significant, a trend that seems likely to continue until the collapse is complete.
Much passionate concern is flying around regarding the United Nations meeting on climate this December in Copenhagen. We hear it from honest activists and from politicians who sound trustworthy on this most crucial matter. An example is Gordon Brown, Prime Minister of Great Britain, who deserves a prize for eloquence in warning us of climate change.
A weekly review including:
– Production and prices
– Copenhagen
– Oil and Money Conference
– Quote of the Week
– Briefs
Our industry is at a crossroads. In the past few years, oil supply has struggled to keep pace with demand. But the financial crisis has reduced demand by 2 million barrels per day, creating excess inventories and lower prices. But once economic growth recovers, it is likely we will return to the market conditions of one year ago. The price of $140 per barrel oil was not an aberration; it was a warning.
“Peak oil can be a very tricky topic, the way I talk about it and deal with it at the end of the day is: We need to revolutionize the way we consume and produce energy… We need to really be the leaders in saying: the future for our children and our grandchildren as far as energy consumption and as far as production, it looks like this” with those words Colorado Governor Bill Ritter started his closing speech at the ASPO conference in Denver that took place from 10 to 12 October 2009.
Hold on to your hat! There will be no smooth descent from the worldwide peak.
