Fossil Fuels

ODAC Newsletter – May 25

by

G8 leaders meeting last weekend in Camp David will have been cheered by the recent slide in oil prices – albeit that the weakening in price is largely a consequence of the increasingly dire economic news. Nevertheless the group issued a statement to the effect that should the price start heading back in the other direction they will be calling on the IEA to take action…

Oil addiction generates denial

by

Whenever the U.S. supply of imported oil is threatened with interruption (or if the U.S. economy should recover much), the global marketplace bids up the oil price, and the politically sensitive price of gasoline will rise in step and depress consumer spending. Whenever the world oil price is high enough, it can cause an economic crisis. In this case global demand may contract sharply, as it did in 2009. The price can never rise for long above what the global oil market can bear.

Greasing the wheel: Oil’s role in the global crisis

by

Between January 2002 and August 2008, the nominal oil price rose from $19.7 to $133.4 a barrel. This led to a large increase in oil revenues for oil exporters and a deterioration of the current account for oil importers. Between 2002 and 2006, net capital outflows from oil exporters grew by 348%, becoming the largest global source of net capital outflows in 2006 (McKinsey 2007).

Capital outflows from oil exporters therefore played an important role in the global liquidity glut during the build-up to the US subprime crisis.

OPEC Has Lost the Power to Lower the Price of Oil

by

There’s been a lot of excitement in the past year over the rise of North American oil production and the promise of increased oil production across the whole of the Americas in the years to come. National security experts and other geo-political observers have waxed poetic at the thought of this emerging, hemispheric strength in energy supply. What’s less discussed, however, is the negligible effect this supply swing is having on lowering the price of oil, due to the fact that, combined with OPEC production, aggregate global production remains mostly flat.

But there’s another component to this new belief in the changing global landscape for oil: the dawning awareness that OPEC’s power has finally gone into decline.

Night Thoughts in Hagsgate

by

There are times, at least for me, when the fate in store for industrial society can be seen with more than the usual clarity. I’m thinking just now of the time I looked out a train window and saw an abandoned factory, not yet twenty years old, with foot-high saplings rising incongruously from the gutter around the roof; or of another time, in a weekend flea market here in Cumberland, when I found a kid’s book on space travel I’d loved as a child, flipped through the pages, and found myself face to face with the gap between the shining future we were supposed to have by now and the mess that was actually waiting for us when we got here.

Crude and Condensate reached new highs in January

by

The EIA helpfully produces a breakdown of the global liquid fuel supply into components. This allows us to distinguish change in the supply of “oil” – narrowly defined as crude oil plus condensates (hydrocarbons which come out of the ground as liquid) – from changes in other things (natural gas “liquids”, most of which are actually gases like ethane, propane, and butane, ethanol, and refinery volume changes.