Insight and inspiration in turbulent times.
At last report BP was making progress on the relief wells that are being drilled to plug the runaway well in the Gulf. The London Times reports that BP hopes to penetrate the casing of the leaking well and start pumping in well-sealing mud in about two weeks. Let’s hope something works.
The race is on: can we extract the last remnants of Western oil from such unlikely places as the ocean floor before the global economy picks up enough to test out the hypothesis that supplies have already peaked?
A roundup of peak oil news, including:
-Oil and the global economy
-The Deepwater Horizon
-Venezuela continues nationalizations
-Quote of the week
-Briefs
Josh Fox’s film Gasland has stirred up a lot of controversy over the environmental damage caused by shale gas drilling. Shale gas reservoir rock lies many thousands of feet below the surface, with the depth depending on the location. In order to get the gas to flow up to the wellhead, operators drill down to the shale rock layer, and then apply a process called hydraulic fracturing to “open up” the rock.
The IEA’s latest medium term report on oil and gas presents a rosier outlook than before. The supply-demand balance will be easier than previously forecast, the Agency now says, as continuing economic weakness dampens demand growth, and stronger oil prices encourage more investment in production capacity. But the report hedges its optimism, warning that potential geopolitical eruptions, and ripple effects from the Deepwater Horizon disaster on offshore drilling remain as risks…
Natural gas is regarded as a relatively environmentally friendly way of generating electricity. Gas burns cleanly without many of the problems associated with coal.
A U.S. federal judge has blocked the six-month moratorium on offshore oil drilling, just as more credence is being given to the notion that the Deepwater Horizon disaster has resulted in multiple leaks on the seafloor – due to well casing damage – making containment a munch lengthier process.
A midweek roundup of peak oil news, including:
-Prices and production
-Deepwater Horizon
As the global economy goes, so goes oil demand. If the outlook for the global economy is not so good, oil consumption will stagnate or increase very slowly. If oil demand grows slowly or not at all, consumption will remain below the world’s productive capacity, as measured in millions of barrels-per-day. If oil demand remains below the available supply, there will be no oil price shock.
What would make the difference between the worst and best cases? That difference would flow not just from a single factor, but from a confluence of many through three main tributaries: luck, competence, and courage.
On June 15th, in their testimony before the House Energy and Commerce Committee, the chief executives of America’s leading oil companies argued that BP’s Deepwater Horizon disaster in the Gulf of Mexico was an aberration — something that would not have occurred with proper corporate oversight and will not happen again once proper safeguards are put in place. This is fallacious, if not an outright lie.
When Big Oil breaks ranks, and one partner in a world-class deal accuses the other of gross negligence, you know that fear has overcome the industry. But fear of what? One presumes it’s the permanent loss of future — or even currently permitted — drilling rights in the Gulf of Mexico because of the disastrous oil spill, in addition to offshore deals around the world. After all, as I’ve written here before, the primacy of Big Oil rests on its claim to technological superiority.
