Insight and inspiration in turbulent times.
…the next tough oil shortage, even if it is not acknowledged as a post-peak oil extraction phenomenon of diminishing supply, will cripple the globalized economy. Understanding of both the economics and social dynamics of collapse is rare, and even when it is present there is an absence of taking into account the “market factor” in ushering in collapse.
Solid article detailing the higher costs of oil sands and industry pressures driving project investments. Includes as context many startling figures: “Shell, based in London and The Hague, reported Feb. 3 that reserves fell in 2004 because it found enough oil to replace just 15 percent to 25 percent of what the company pumped. BP replaced 89 percent of production, the company said Feb. 8”.
Asia’s insatiable appetite for oil coupled with tight supplies has triggered the start of a global bidding war for oil from the Middle East, the head of ChevronTexaco Corp. said on Tuesday.
Such openness is rare; it set me back on my heels. The question came last Monday as I finished a lecture in Pewaukee, Wisconsin–the first of a handful of talks I gave for “Great Decisions 2005.”
The Organisation of Petroleum Exporting Countries signalled a significant tightening of oil markets towards the end of this year, warning on Wednesday it would have to pump close to its maximum capacity next winter to meet rising demand from China against the backdrop of slowing Russian production.
The world – and of course the US – now faces an epochal predicament: the global oil production peak and the arc of depletion that follows. We are unprepared for this crisis of industrial civilization. We are sleepwalking into the future.
A new organization is being founded this month in cities across the Midwest – Oil Addicts Anonymous – modeled after the multitude of successful 12 step programs such as Alcoholics Anonymous.
In the past week, oil prices have regained about US$3 a barrel after hitting a low of $45. Apart from the perennial US weather factor, positive sentiment was reinforced by IEA (International Energy Agency) data revising previous forecasts for world oil demand growth in 2005 by 80,000 barrels per day.
Transneft president says, “Beyond 2005 we will probably reach the ceiling in [Russian oil] output. The period of easy oil extraction is over and to boost output further we need serious capital investment and more time.”
But many Caspian estimates proved to be unrealistic, at least in the short term. Experts now say the Caspian should in coming years pump some 4 million to 5 million barrels per day, on par with Iran.
Although the United States has long consumed the lion’s share of the world’s resources, this situation is changing fast as the Chinese economy surges ahead, overtaking the United States in the consumption of one resource after another.
OPEC, producer of more than a third of the world’s oil, and the European Union plan to hold twice- yearly meetings to discuss how to maintain a stable oil price acceptable to producing and consuming countries.
