Oil

Understanding the new price of oil

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In the spring of 2011, when Libyan oil production — over 1 million barrels a day (mpd) — was suddenly taken offline, the world received its first real-time test of the global pricing system for oil since the crash lows of 2009. Oil prices, already at the $85 level for WTIC, bolted above $100, and eventually hit a high near $115 over the following two months. More importantly, however, is that — save for a brief eight week period in the autumn — oil prices have stubbornly remained over the $85 pre-Libya level ever since. Even as the debt crisis in Europe has flared.

A tough-oil world

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The principal cause of higher prices — a fundamental shift in the structure of the oil industry — cannot be reversed, and so oil prices are destined to remain high for a long time to come.

We are now entering a world whose grim nature has yet to be fully grasped. This pivotal shift has been brought about by the disappearance of relatively accessible and inexpensive petroleum — “easy oil,” in the parlance of industry analysts; in other words, the kind of oil that powered a staggering expansion of global wealth over the past 65 years and the creation of endless car-oriented suburban communities. This oil is now nearly gone.

Tough-oil reserves will provide most of the world’s new oil in the years ahead. One thing is clear: even if they can replace easy oil in our lives, the cost of everything oil-related — whether at the gas pump, in oil-based products, in fertilizers, in just about every nook and cranny of our lives — is going to rise. Get used to it. If things proceed as presently planned, we will be in hock to big oil for decades to come.

No number crunching in Alan Kohler opinion piece on premature peak oil death

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An awe-inspiring takedown of a sloppy story on the death of peak oil.

Alan Kohler, who is known for his excellent financial graphs on the ABC TV (Australia) 7 pm News came out with an opinion piece on peak oil which does not display the level of research expected from him. Almost no statement in his article can be supported by statistical evidence. No numbers are shown to prove that shale oil can compensate for oil decline in maturing oil fields around the world.

What’s worse, the fight over oil in and between Middle East and North Africa (MENA) countries due to peaking in key countries is completely forgotten. The EIA estimates that despite increasing unconventional oil production the dependency on OPEC oil will not be reduced. Reserves and resources are mixed up and those vast gas reserves are neither used to replace coal nor oil (as transport fuel). The CO2 from an assumed unconventional oil and gas boom will cook us alive.

The problem with such articles is that they contribute to further delay the real transformation away from oil (and fossil fuels in general) which can only be done by massive rail projects and preserving oil where it will be needed most: in agricultural production and transport of food to the cities.

Oil, Iran and the peak – March 8

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– Stop blaming oil speculators and start listening to them: A war with Iran would devastate the economy
– We Can Live with a Nuclear Iran
– Oil creeps toward top of Asia’s economic worry list
– 10th ASPO-International Conference in Vienna May 30 – June 1
– Ölreserven: Der “Doomsday” war gestern

Review: Petroplague by Amy Rogers

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We have a brand-new entrant to the oil-eating-bug-runs-amok tradition: the self-published novel Petroplague. It’s a Crichton-esque thriller written by microbiology professor-turned author Amy Rogers, who says she aims to “blur the line between fact and fiction so well that you need a Ph.D. to figure out where one ends and the other begins.” The plot involves a batch of experimental, oil-hungry bacteria inadvertently loosed upon Los Angeles, which proceed to wreak a near biblical swath of destruction. Part ecology lesson and part cautionary tale, Petroplague is an entertaining entrée into the subject of oil depletion and its implications for society, human health and the environment.