Author: ASPO-USA

Shale oil’s investment cycle is shorter and its decline profile sharper than conventional oil production. Current indicators suggest legacy declines from shale will catch up fast with the industry. This points to a sharp deceleration in US shale oil output. But, while conventional oil takes time to slow down, it also takes time to speed up. It will be shale that is best placed to benefit from any oil price recovery, as Ross McCracken, managing editor of Platts Energy Economist , explains in this month’s selection from the publication. The full analysis can be found in the February 2015 issue, which is also issue 400 of Energy Economist. Global crude oil production has only fallen in six years since 1984 and then generally as a result of geopolitical disruptions to supply or restraint by OPEC, rather than as a reaction to price. This is because the conventional oil industry […]

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Saudi Arabia’s Succession Line Is Set, but the Nation’s Path Remains Uncertain thumbnail Saudi Arabia’s new king moved with unprecedented swiftness on Friday to appoint not only the heir to his throne but the heir to his heir as well. If all proceeds according to plan — as most Saudis and some analysts assume it will — the chain of succession dictated by King Salman after the death of his half brother Abdullah lays out who will be the head of state of one of the Arab world’s richest and most influential nations through the middle of this century. Such a long-term road map represented a show of confidence in the national project, especially in an era when longtime Arab leaders have been tossed out by popular revolts and neighboring states like Iraq, Yemen and Syria are breaking apart. But analysts who study Saudi Arabia say that despite the […]

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How we went from peak oil to too much oil thumbnail It’s not the worry we’ll run out of fossil fuels that’s the problem any more. Quite the opposite. Al Gore at Davos: “Companies are insisting on their right to use our atmosphere as an open sewer.” A third of oil reserves, half gas reserves and over 80% of coal must remain in the ground. If you remember the 20th Century, you probably remember people worrying we’d run out of fossil fuel. It’s a worry with a long and often over-hyped history. As Matt Novak neatly demonstrates , people have been wrong about running out of oil for well over a hundred years. In 1909, it was thought the oil age had 25 or 30 years longer. In 1919, it was two to five years. In 1937, the director of US naval petroleum reserves, told the Senate Naval Affairs […]

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IHS Vice Chairman Daniel Yergin speaks with Bloomberg’s Tom Keen about oil prices. They speak at the World Economic Forum in Davos, Switzerland on “Bloomberg Surveillance.” How many victory laps? Do you feel like yes, i got it right? It is hard. Here, i remember people say you do not believe in peak oil. Not really. We have seen peak oil. It has been followed by a glut. New areas open up and new technology. U.s. oil production is up 80%. for our viewers in the middle east, in 1986, the price came down and went flat. Do you predict that again? There are analogies there.

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With the recent collapse in the price of oil, Gail Tverberg, returns to discuss the likely impact on the US shale oil industry, as well as the global market for oil. Gail is a professional actuary who applies classic risk assessment procedures to global resources: studying issues such as oil & natural gas depletion, water shortages, climate change, etc. These days, she writes at her website OurFiniteWorld.com . While as an actuary, Gail is one to avoid hyperbole and the let the numbers speak, her analysis of the outlook for future oil production is nothing short of dire: What we need is cheap energy. We need cheap, liquid oil. When it’s high-priced it really messes up the economy. We need oil to run our cars and to operate our trucks and such things, but it needs to be cheap. And it suddenly is today. But, you have to be able […]

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Photo: Berardo62. Cropped. Licence: https://creativecommons.org/licenses/by-sa/2.0/ During the 1990s, the oil price was around $10-20 a barrel. Petrol was cheap and SUVs and gas guzzlers were selling in record numbers. Oil company share prices were low and there was next to no oil exploration. Yet wells from the North Sea to Saudi Arabia were still producing oil — after all, once an oil well has been drilled, the costs of actually pumping out hydrocarbons are marginal. A perfect theory? But since there were few discoveries of oil, and as current reserves dried up, production inevitably fell. Round about the turn of the century, inventories started to slide and oil prices began to rise. These rises gathered momentum and soon the oil price was reaching all-time highs, peaking at $147 a barrel. The effects of these high commodity prices rippled around the world. The shares of companies like BP (LSE: BP.), Shell (LSE: RDSB) and Petrofac (LSE: PFC) soared. Lord Browne, at that […]

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Renewable Resources Reach Their Limits thumbnail Can the world continue expanding its use of renewable resources at an increasing rate? Most likely not. Using a data set of over 25 resources researchers at the Helmholtz Centre for Environmental Research (UFZ), Yale University and Michigan State University demonstrate that several key resources have recently passed, at around the same time, their “peak-rate year” — the maximum increase year. A potential implication is that as substitution becomes arduous, global society’s expanding needs will be harder to fill. They explain this in an article published in the latest issue of the international journal Ecology and Society, and featured in the journal Nature’s Research Highlights this week. Landscape ecologists Prof. Dr. Ralf Seppelt, Dr. Ameur M. Manceur and plant ecologist Dr. Stefan Klotz from the UFZ analyzed the production and extraction rates of 27 global renewable and non-renewable resources together with economist Dr. […]

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The oil price crash coupled with growing concerns about global warming will encourage at least one of the major oil companies to turn its back on fossil fuels in the near future, predicts an award-winning scientist and former industry adviser. Dr Jeremy Leggett, who has had consultations on climate change with senior oil company executives over 25 years, says it will not be a rerun of the BP story when the company launched its “beyond petroleum” strategy and then did a U-turn . “One of the oil companies will break ranks and this time it is going to stick,” he said. “The industry is facing plunging commodity prices and soaring costs at risky projects in the Arctic, deepwater Brazil and elsewhere. “Oil companies are also realising it is no long morally defensible to ignore the consequences of climate change.” Leggett, now a solar energy entrepreneur and climate campaigner, points […]

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Posted:   01/10/2015 05:01:00 PM MST Gas prices are displayed at a gas station in Boston last week. (Steven Senne, The Associated Press) In Denver, gasoline dipped below $2 per gallon after Christmas, and I’ve heard rumors of $1.75. Most of us like this immensely. Not so the stock market, which has stumbled as oil prices have dipped below $50 per barrel. Cheap oil has also gummed up a variety of political arguments. Keystone XL is at the top of the news today, as it was last fall when many political candidates, from statehouse to Congress, ran on platforms seeking "energy security." This sounds suspiciously like code for giving drilling companies and pipeline transport companies just about everything they want. The argument on behalf of Keystone XL is that it will, with the help of the Canadians, deliver us from the capriciousness of "people who don’t like us," as […]

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