Month: March 2014

World stock markets may be over-valuing companies with fossil fuel assets that may be unburnable, UK lawmakers warned Thursday. The UK’s Environmental Audit Committee released a report warning that over-priced fossil fuel assets pose a systemic risk to global markets. "The UK government and Bank of England must not be complacent about the risks of carbon exposure in the world economy," said committee chair and member of parliament Joan Walley. "Financial stability could be threatened if shares in fossil fuel companies turn out to be over-valued because the bulk of their oil, coal and gas reserves cannot be burnt without further destabilizing the climate," she said. "The record-breaking extreme weather events causing chaos across the globe should be a wake-up call," said Walley. "The transition to a low carbon economy will be much more painful if we wait until there is a climate crisis […]

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An observation worth noting … and pondering, from Mark Lewis (links in original): Oil market commentators increasingly dismiss the very idea of supply-side constraints on the oil market, pointing to the recent surge in light-tight oil production from US shale deposits and the existence of vast shale formations elsewhere in the world…. But does this peak demand theory bear scrutiny? [F]rom data for 2013 released by the EIA recently, it is now clear that US demand not only increased last year, but accelerated rapidly over the course of the year. All of [the data reported by the author] implies that the reduction in US oil demand over 2008-12 was not so much structural as due mainly to the weakness of the US economy following the global financial crisis, and the tightness of the local oil market until recently. As the economy has started […]

Click here to view full article at peakoil.com

For years, meaning until the arrival of U.S. shale production, much ink was spilled on the concept of "peak oil" — the argument that the world was fast approaching an absolute maximum of crude oil that can be produced on a  daily basis. Shale production has put the kabosh on that for the time being, but there’s another "peak" to argue about, and it’s peak demand. Oil consumption in Western Europe, Japan and the United States has  been declining since about 2005. Have we hit "peak demand?" Not hardly, at least not worldwide, agreed three panelists at the ongoing IHS/CERAWeek energy conference in Houston. Demand from Asia and the developing world will more than offset declines in OECD nations, said the panelists, all refiners. Bill Klesse, CEO of San Antonio-based Valero Energy, said world crude oil demand can be expected to grow about 1 million barrels per year through 2025. […]

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Steve Kopits, in his recent presentation at Columbia University , ridiculed the IEA’s often used term a “ Call on OPEC “. That is, the IEA looks at the world oil supply and if they see a supply shortage looming on the horizon they then issue a “Call on OPEC” to supply x number of extra barrels and fill that gap. But the next time the IEA issues such a call can OPEC deliver? Or, is OPEC already producing every barrel they possibly can. One thing for sure, there are eight OPEC countries that are definitely producing every barrel they possibly can, those countries are Algeria, Angola, Ecuador, Iran, Libya, Nigeria, Qatar and Venezuela. The chart below is the combined production of those 8 nations. All charts in this post are “Crude Only” in kb/d with the last data point Jan. 2014. There can be no doubt […]

Click here to view full article at peakoilbarrel.com

“For some years now,” Tim Morgan writes in Life After Growth , “global average EROEIs have been falling, as energy resources have become both smaller and more difficult (meaning energy-costly) to extract.” You may have heard of this concept called energy return on energy invested (EROEI). It looks at how much energy we expend in relation to how much energy we extract. Some, like Morgan, think this is very important. Consequently, falling EROEIs have become the basis of a variety of dire forecasts… Be skeptical of anything that seeks to analyze our economy by taking money out. In these scenarios, we spend more and more energy just getting energy, and we have less and less for other discretionary items. As Morgan writes, “If EROEI falls materially, our consumerist way of life is over.” I’m writing to you today to slay this flawed EROEI concept. I have to say I […]

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Oil industry costs are spiraling out of control, and it’s time to rein them in, Total CEO Christophe de Margerie insisted Tuesday. “Excellence cannot be an excuse for doing anything at any price,” de Margerie told oil and gas industry executives gathered at the IHS CERAWeek energy summit in Houston. “We cannot continue to swallow this huge inflation.” The French oil executive suggested that soaring capital expenditures are partly being driven by greedy subcontractors. He stopped short of naming names, but blamed “Asian countries (that) think we are ready to pay forever.” “We have to go to the sub-subcontractors and say: ‘We know what’s going on. We can no longer be the deep pocket,’” de Margerie said. Big oil cuts De Margerie’s comments came […]

Click here to view full article at fuelfix.com