Author: ASPO-USA

The Wall Street Journal recently ran an article called, Glut of Capital and Labor Challenge Policy Makers: Global oversupply extends beyond commodities , elevating deflation risk. To me, this is a very serious issue, quite likely signaling that we are reaching what has been called Limits to Growth , a situation modeled in 1972 in a book by that name. What happens is that economic growth eventually runs into limits. Many people have assumed that these limits would be marked by high prices and excessive demand for goods. In my view, the issue is precisely the opposite one: Limits to growth are instead marked by low prices and inadequate demand . Common workers can no longer afford to buy the goods and services that the economy produces, because of inadequate wage growth. The price of all commodities drops, because of lower demand by workers. Furthermore, investors can no longer […]

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This is the cleft stick within today’s global energy supply: too little ‘cheap energy’ to enable economic growth, too low a return on capital to allow investment in higher production. A few weeks ago tremors rocked the world of ‘fracking’ in the USA – though few heard them. The US Energy Information Agency (USEIA) had issued its latest Monthly Drilling Report and the news was not good. It wasn’t simply the economic failure of fracking (covered in The Ecologist last December ) and the subsequent collapse in drilling ( covered in January ). The news from the USEIA was far more grim for those who understood its deeper meaning. Their press release was very matter-of-fact: “EIA’s most recent Drilling Productivity Report (DPR) indicates a change in the crude oil production growth patterns in three key oil producing regions… The DPR estimates include the first projected declines in crude oil […]

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Since around 2005 many countries have increased their oil production but more have decreased. But the combined production of the United States and Russia have kept the world on a slight uptrend since that time. World oil production jumped in 2011, hardly moved at all in 2013 but it was up by more than 1.5 million barrels per day in 2014. And after such a huge gain everyone and their brother were singing “peak oil is dead’. But if you scroll down through the 37 major world oil producers it becomes obvious that a majority of nations have peaked and most of them are in steep decline. The above chart is EIA data; however, the next four charts below are JODI data with the last data point February 2015. The data on all charts is thousand barrels per day. In the last decade it has been two of the […]

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The result, in my opinion, is as startling as it is world-changing: Global oil demand will peak within the next two decades. A less potent weapon The geopolitical and economic implications of peaking demand will be huge. The fall in the importance of Saudi Arabia is already palpable, with all the major powers from the U.S. to China more willing to accommodate Saudi archrival Iran. In addition, Russia’s ability to use oil as a weapon will wane, as will the economic leverage of the Organization of the Petroleum Exporting Countries. As economic growth becomes increasingly disconnected from oil, world powers will likely shift their attention to other increasingly scarce resources that will be equally critical to economic well-being, such as food, water and minerals. A greater interest in Africa, for example, is already starting to emerge. For sure, peak demand is far from how the oil patch sees things. […]

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Since around 2005 many countries have increased their oil production but more have decreased. But the combined production of the United States and Russia have kept the world on a slight uptrend since that time. World oil production jumped in 2011, hardly moved at all in 2013 but it was up by more than 1.5 million barrels per day in 2014. And after such a huge gain everyone and their brother were singing “peak oil is dead’. But if you scroll down through the 37 major world oil producers it becomes obvious that a majority of nations have peaked and most of them are in steep decline. The above chart is EIA data; however, the next four charts below are JODI data with the last data point February 2015. The data on all charts is thousand barrels per day. In the last decade it has been two of the […]

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Despite the exploitation of unconventional oil resources like high-cost tar sands (pictured in Canada) and shales, peak oil really is upon us. Photo: Gord McKenna via Flickr (CC BY-NC-ND). The ‘death of peak oil’ has been much exaggerated, writes Paul Mobbs. Take out high-cost ‘unconventional’ oil and production peaked ten years ago, and even North America’s fracking and tar sands boom has failed to open up new resources both big enough to make good the shortfall, and cheap enough to reward investors. We really do need to be thinking ‘beyond petroleum’. This is the cleft stick within today’s global energy supply: too little ‘cheap energy’ to enable economic growth, too low a return on capital to allow investment in higher production. A few weeks ago tremors rocked the world of ‘fracking’ in the USA – though few heard them. The US Energy Information Agency (USEIA) had issued its latest […]

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4 Comments on "Dmitry Orlov Peak Oil Lessons From The Soviet Union" Plantagenet on Mon, 4th May 2015 1:55 pm  The Soviet Union was never at peak oil. The problem in the USSR had to do with bad economic policies and genocide and repression carried out by a totalitarian red fascist police state. sugarseam on Mon, 4th May 2015 3:43 pm  As always, you don’t appear to know what you’re talking about, Plant. Your Red Scare is showing, as is the case with most narrow-minded cons. “Red fascist.” What a laughable bastardization of language. They showed us their underbelly after the Wall fell, and predatory capitalists went in and pilfered their country to the tune of hundreds of billions (Harvard Foundation, et al). The number of times that nation has offered an olive branch since Hiroshima only to have greedy Western fascists pull the rug out is hard to […]

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There has been a lot of attention recently to the longer term viability of global fossil fuel reserves. Due to the fall in oil, natural gas and coal prices, the FT reports this week that all the oil majors have slipped into loss as a result of of the low oil and natural gas prices. Why Manufacturers Need to Ditch Purchase Price Variance That’s not the reason for the viability questions, though, that attention is due more as a result of future climate change legislation raising the cost of carbon-based fuels. Another article leads with comments made by Glencore Plc ’s chief executive, Ivan Glasenberg, in the company’s recent sustainability report. Glencore’s Bullish Reacting to investor concerns (not just at Glencore but at all energy companies) he is quoted as saying “Although climate change issues are part of the political, societal and regulatory landscape, we do not believe that […]

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Summary Recent oil crashes show you the hard floor for gauging value oil company equities. Properly understood, the crashes lend an insight into the concept of Peak Oil. All oil equity investors should understand the overarching upward trend on display here. PLEASE NOTE: ALL prices used in this article are using current 2015 dollars, inflation adjusted using the US BLS inflation calculator Generally, when I invest, I try to keep my thesis very simple. Find good companies, with good balance sheets and some kind of specific catalytic event on the horizon. But when one starts to concentrate their holdings in a sector, as I have recently in energy (see my recent articles on RMP Energy (OTCPK: OEXFF ) and DeeThree Energy (OTCQX: DTHRF ) , you need to also get a good handle on the particular tail or headwinds that are affecting it. Sometimes a sector like oil (NYSEARCA: […]

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General Ideas While all the buzz surrounds oil prices, the global demand side remains on solid footing: up. Supplying 33% of all energy, oil is the world’s primary fuel. Oil is so important that global demand is ever-growing: 67 million b/d in 1990, 77 million b/d in 2000, and 91 million b/d in 2014. I’ll never understand the animosity of some Westerners toward critical fuels that they depend on everyday, making their lives easier in ways their great grandparents only dreamed of. [1] “Animosity” directed to fossil fuels? Has a nice right-wing playbook buzz to it, but those of us concerned with facts have an annoying habit of insisting that all of them be considered, and that consequences must also find a place at the table where overly-broad statements otherwise prefer being alone. And how exactly does one direct animus toward an energy source which has indeed made it […]

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Today we will take a look at both Whiting Petroleum (WLL) and Continental Resources (CLR) as far as their Bakken economics. Overall the numbers will show that, despite claims of low cash costs per MBOE ($16 or so for CLR) and high IRRs on $60 WTI, the facts say otherwise. In addition, the analysis will show how very high depletion rates combined with falling rig counts spells trouble for Bakken production growth despite better efficiencies per well. The analysis will be based on April presentations of both companies from which the graphs below are taken. I should note these economics are not much different from Eagle Ford, the second most prolific addition to US production growth in past years. Firstly one must understand that the easy money via QE from the Fed and zero interest rates allowed many shale players to burn free cash flow while showing operationally net […]

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This blog began seven years and almost a thousand posts ago, and I thought it a good time to take stock. Since the blog itself was inspired by the “peak oil” movement, and since it’s been ten years, by some measures, since the peak, I wanted to assess the state of that community as well. First the personal notes: Many of my posts are reprints of my columns for our local newspaper, or for Grit and Mother Earth News magazines, short and focused on gardening and crafts. I’d like to write longer articles about broader subjects as well, however, as I have for American Conservative or Low-Tech Magazine, so I’m cutting back to twice a week – one new article every weekend, and one reprint or photo mid-week. There’s a great deal to write about, you see, and too little time. We have three generations of family living in […]

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Five percent of the world’s oil tanker capacity is waiting to load up near Basra Iraq, where production is way up. The United States has only one month of oil storage capacity left. After that, what comes in must go straight to market, likely for as little as $20 a barrel. Is peak oil dead?  And why isn’t the economy responding to cheaper oil? We’ll ask the guru, Richard Heinberg. He’s one of the people who popularized the oil squeeze, with his book "The Party’s Over". Heinberg has a new book out  Afterburn: Society Beyond Fossil Fuels . After that, during this Spring in the Northern Hemisphere, a couple of us hope to persuade you to grow some of your own food. Marjory Wildcraft, from  growyourowngroceries  joins us. There’s a lot of reasons we need to pay attention to the food supply.

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This article  was written by Oilprice.com, the leading provider of energy news in the world. Check out these other articles. Earthquake Case Could Doom Fracking In Oklahoma Saudi Influence On Oil Markets Slipping It appears as if oil prices could be on the verge of a rebound, with new data showing that the U.S. oil patch is hitting an inflection point. While specific shale regions — such as  North Dakota’s Bakken and Texas’ Eagle Ford  — have posted production declines, overall U.S. oil output managed to edge up in recent months. But now that U.S. production has finally dipped, it may augur a new phase for oil markets in which production cutbacks could lead to higher prices. The Energy Information Administration  reported  on April 1 that total U.S. oil production fell for the week ending on March 27, falling 36,000 barrels per day to 9.38 million barrels per day. […]

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3 Comments on "Supply or Demand? Peak Oil with Richard Heinberg and James Hamilton" Davy on Sat, 28th Mar 2015 10:10 am  Why don’t these academic greenie weennies divest out of the car culture and show real backbone? Why don’t they admit that no matter how much they want to have their cake and eat it there are no free lunches? Why don’t they admit or try to understand that BAU is carbon and without carbon there is no BAU. Then while they are at it admit without BAU there is no Stanford. This is just another greenie joke of feel-goodism that will go nowhere. If you want to change things then lobby government to restrict liquid fuels enough to put the economy in a tailspin so we can begin the power down that will involve huge changes to bad attitudes, lifestyles, and economic activity. This power down will […]

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In the past, the usual “oil crisis” was caused by self-serving news items of an oil shortage, causing soaring prices. Just 2-3 years ago, the fear mongers said that the world had “seen peak oil,” meaning that oil production would be on a long term decline and there would be big shortages. Instead, oil production is now at a high The current crisis is one of plunging oil prices and a glut as far as the eye can see. Oil production, after prices have fallen over 60%, is at a new high. As we predicted late last year, oil producers are making up for plummeting income by pumping even more. Rig counts in production are plunging, but these are from the low production wells. The high producers are still pumping away. In fact, the latest rig count even shows that there is little additional reduction in producing rigs. The […]

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However, there is concern for decades that in a finite world at some point should be the limits of the world’s population, and that may not be very smart to reach those limits. Although efforts to limit population growth in some countries like India or China, today these efforts have been abandoned or are abandoning were made in the second half of the twentieth century, mainly due to the pace of population growth is declining alone globally. As in all matters based on the laws of nature, we can use science to analyze the problem of the human population. The science that helps us in this case is ecology, which has a specific branch of human ecology . Anyone who thinks that we do not apply the laws of biology, is that it has lost touch with the reality of human nature. For very rational to presume to be, […]

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Heinberg: AFTERBURN Society Beyond Fossil Fuels thumbnail The advent of fossil fuels changed the world profoundly (giving us everything from plastics and automobiles to global warming); the inevitable and rapidly approaching end of the oil-coal-and-gas era will likewise bring overwhelming transformation in its wake. My new book Afterburn explores that transformation—its opportunities and challenges—in sixteen essays that address subjects as varied as energy politics, consumerism, localism, the importance of libraries, and oil price volatility. Afterburn is a book of “greatest hits”—that is, popular essays that have been previously published—similar in that respect to an earlier book of mine, Peak Everything (2007). Like that previous collection, this one has been carefully selected and arranged, and features an all-new Introduction. Here are just a few of the highlights: “Ten Years After” reviews the debate about “peak oil” from the perspective of over a decade’s work in tracking petroleum forecasts, prices, and […]

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Pickens: Oil Could Hit $100 A Barrel thumbnail Amid falling oil prices mostly due to fears of oversupply and a surging U.S. dollar, American business magnate and financier T. Boone Pickens said Tuesday that oil prices could reach $100 a barrel by the end of next year. The 86-year-old billionaire, who chairs the hedge fund BP Capital Management, also revised his previous forecast in which he said that the prices would hit the $100 mark as early as this year. According to Pickens, the idea of “peak oil” — when oil production goes into an irreversible decline — should not be ignored as regions other than the U.S. are experiencing decline in their oil output, Reuters reported. “I think you could very well be at $100 a barrel by the end of 2016,” Pickens said at the Commonwealth Club of California in San Francisco. Although oil prices briefly recovered […]

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David Bernal, Allegro Development This article is written by David Bernal who is a Senior Solutions Manager for Allegro Development, a real-time commodity trading information services and risk management firm. Whether you blame technology, politics, softening demand or a mix of all three, the recent oil price plunge is testament to the dynamic nature of energy markets and the huge risks that emerge in a period of profound volatility. The most important question for energy market participants however, is how they can minimise our exposure? Technology in the form of hydraulic fracturing (fracking) and horizontal drilling has arguably made America the world’s pre-eminent oil producer, pulling up to 4m barrels a day from sources that were once called “unconventional”. So much oil is sloshing around that Congress has taken its first tentative steps toward removal of the crude export ban by allowing exports of certain condensates. Full-on exports of crude […]

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Rising energy prices will challenge western way of life thumbnail A little-known Ministry of Defence (MoD) report published earlier this year warns that converging global trends will dramatically affect UK economic prosperity through to 2040. The report says that depletion of cheap conventional “easy oil”, along with shortages of food and water due to climate change and population growth, will sustain rocketing energy prices. Long-term price spikes are likely to lead to a long recession in Western economies, fuelling internal unrest and the rise of nationalist movements. The report departs significantly from the conservative and relatively optimistic scenarios officially adopted by the British government, as exemplified in the coalition’s new Energy Security Strategy published in November last year by the Department of Energy and Climate Change (Decc). Peak “easy oil” The report predicts that “the imminent passing of the point of peak ‘easy oil’ will mean that hydrocarbon-based energy […]

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What if the world never again sees sustained prices for oil over $100 per barrel? What if—absent exogenous black-swan events like major wars—oil never sells for much more than $50 per barrel for decades into the future? Who wins? Who loses? Short answer: The winners are consumers everywhere, and American businesses that produce oil. The losers are nations that are oil monocultures, and businesses or policies everywhere anchored in expensive oil. Is such a scenario likely? Or is the current price collapse a kind of inverse bubble? History is often meaningfully predictive. In the roughly 150-year history of oil prices there have been just three short periods where oil sold for over $50 per barrel (measured in inflation-adjusted terms). It happened first for about 20 years after 1860 at the dawn of the oil age, followed by nearly a century with oil cycling around $20. The second price bubble, […]

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Sadly, fossil fuels are about as sustainable as my chocolate supply thumbnail WHAT exactly is Transition about? asks Sally Elias. “No, I still don’t get it,” said a good friend, exasperated. “What exactly is Transition all about?” We Dorking Transitioners have always struggled with the challenge of a succinct explanation – a lift-pitch. If you say “We are trying to save the planet”, you sound “boring and worthy” (not my words). If you mention post peak oil, people glaze over or say, “Well now they have discovered fracking we don’t need to worry”. Or if you mention global climate change… well, we all know how that goes down with some people – apparently it’s NOT HAPPENING.  I am not terribly bright, but I do hang out with intelligent people who have read a lot more, studied a lot more and understand a lot more than I do about all […]

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March 11, 2015 (NATIONAL) — If you’ve never heard of the concept of "peak oil" don’t feel left out. The news media rarely mentions it even though it may be one of the most significant events in the history of humans on earth. Because if peak oil hits in our lifetime, things could get dicey for every human being on the planet sometime this century. LIfe as we know it in a modern world could change forever. Peak oil is a predicted future event made famous by Marion Hubbert (October 5, 1903 – October 11, 1989) who was a a geoscientist working at the Shell research lab in Houston, Texas. He made important contributions to geology and petroleum geology, including what is called the Hubbert curve and Hubbert peak theory, a basic component of peak oil. Peak oil refers to the point in time when the maximum rate of […]

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BLASTED: An aerial photograph showing what United States military officials describe as a Command and Control Facility in the town of Tikrit, Iraq, after air strikes appears in this recent undated military handout photograph. As the empire continues to collapse, imperialism and the blatant lies (that come with it) will no longer matter. The PTB will plow forward steamrolling anything in the unrelenting ways of “progress”. We all know what the perpetual war in the middle east is about. Most mindlessly go about filling the car and shopping, whispering to themselves, “We see it, we know it, we just are not allowed to say it”, for fear of losing the false sense of security that the deception of empire instill, through delusion of comfort and “security”. “Oh holy crude” sung to the tune of “Oh Canada.” Elijah and the Widow would be proud ( The Peak of The Oil […]

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By Robert and Sonia Vogl President and Vice President, Illinois Renewable Energy Association We were asked recently if peak oil remains an issue. Just as cold weather stimulates doubt regarding climate change the current low price of oil stimulates doubt about peak conventional oil. Such short-term anomalies confuse the public and bring out a new round of denials regarding the existence of these long-term trends. Researchers documenting peak conventional oil provide data indicating it occurred around 2005. Since then the production of conventional oil has been virtually flat. The dramatic increase in the production of oil shale in the United States obscured recognition of the long term implications of the drop in conventional oil supplies. As major independent oil companies such as Exxon Mobil and Shell spent more money on developing new sources of oil the actual amount of oil secured per capital expenditure declined. In response, oil companies […]

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Why don’t more homes have this sign? Photo: U.S. Department of Agriculture/Flickr. Some people who worry about peak oil like to point out that renewable energy won’t save us. That is, given the amount of fossil fuels that the world uses today, it would take an unrealistically large increase in the amount of renewables available now to make up the difference as oil, natural gas and coal start to deplete. So we might as well resign ourselves now to a future of shivering in the dark. Those same peak oil doomers share what they seem to think is news to the rest of us — namely, that solar panels require oil. Petroleum-based plastics and chemicals go into solar panel components. And of course energy, mostly fossil fuels, is required to make, ship and even install solar panels. This is somehow supposed to mean that solar power is bogus and […]

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Summary: In a world overrun with humans, what fate awaits wildlife, fisheries, and forests when the fuels run short? Several years ago I was working as a biological consultant to the U.S. Fish and Wildlife Service, helping this federal agency prepare a long-term management plan for Innoko National Wildlife Refuge (NWR) in Alaska. This Comprehensive Conservation Plan (CCP) would provide overall management guidance for the refuge’s wildlife, habitat, and public use. The huge, sprawling 3.8-million acre (5,940-square mile) Innoko NWR is one of the remotest national wildlife refuges in the United States. It is so wild that it contains not a single human inhabitant in all that vastness; its headquarters are located in the village of McGrath, on the Kuskokwim River, some 50 miles as the raven flies from the refuge itself. In 1980, the U.S. Congress officially designated 1,240,000 acres of Innoko NWR (1/3 of it) as part […]

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The collapse in oil prices over the last seven months looks to destabilize the world stage by redirecting over $1.8 trillion in spending if current prices hold. While worldwide demand exceeds 92 million barrels per day , the drop in price from over $105 this past summer to under $50 translates into sizable savings for the average American. Who Gains vs. Who Loses Spread out across all industries, U.S. consumers could be looking at an extra $300 billion in savings this year, since oil touches just about every aspect of daily life in one form or another. The working poor, in particular, will be the largest beneficiaries , since energy expenses constitute a greater percentage of household income for them than for any other group. They will likely feel as though they are getting ahead, for a change, rather than continuing to slip further into the abyss . The impact of “less pain at the pump” […]

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The collapse in oil prices over the last seven months looks to destabilize the world stage by redirecting over $1.8 trillion in spending if current prices hold. While worldwide demand exceeds 92 million barrels per day , the drop in price from over $105 this past summer to under $50 translates into sizable savings for the average American. Who Gains vs. Who Loses Spread out across all industries, U.S. consumers could be looking at an extra $300 billion in savings this year, since oil touches just about every aspect of daily life in one form or another. The working poor, in particular, will be the largest beneficiaries , since energy expenses constitute a greater percentage of household income for them than for any other group. They will likely feel as though they are getting ahead, for a change, rather than continuing to slip further into the abyss . The impact of “less pain at the pump” […]

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The World After Cheap Oil thumbnail The World After Cheap Oil By Rauli Partanen, Harri Paloheimo and Heikki Waris 250 pp. Routledge – Oct. 2014. $59.95. Toward the end of this book, its authors make an astute, if self-deprecating, observation about its potential merits. They’ve been discussing how innate human biases cause us to make cognitive errors when trying to make sense of world crises. They’ve described in particular the tendency of scientifically knowledgeable people to become less convinced about climate change the more evidence they encounter for it, due to confirmation bias. For the authors, this fact “raises the question of how meaningful writing this book has actually been.” Won’t skeptical readers simply cherry-pick the data that support their views and reject the rest? While it is, of course, correct that some readers will do this, there’s no question that writing the book has been meaningful. Indeed, in […]

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Terraced rice paddy fields are seen during the harvest season in Mu Cang Chai, northwest of Hanoi. Global food poisoning? Yes, We’re maxing out. Forget Peak Oil. We’re maxing-out on Peak Food. Billions go hungry. We’re poisoning our future, That’s why Cargill, America’s largest private food company, is warning us: about water, seeds, fertilizers, diseases, pesticides, droughts. You name it. Everything impacts the food supply. Wake up America, it’s worse than you think. We’re slowly poisoning America’s food supply, poisoning the whole world’s food supply. Fortunately Cargill’s thinking ahead. But politicians are dragging their feet. They’re trapped in denial, protecting Big Oil donors, afraid of losing their job security; their inaction is killing, starving, poisoning people, while hiding behind junk-science. The truth is, America, Big Ag worldwide farm production can’t feed the 10 billion humans forecast on Planet Earth by 2050. Can we wait till 2050 for the fallout? […]

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It all started with peak oil, the point when the maximum rate of extraction is reached, after which production begins to decline By Gwynne Dyer PEAK OIL is so last year. Now we can worry about peak everything: peak food, peak soil, peak fertiliser, even peak bees. Let’s start small. We depend on bees to pollinate plants that account for about one-third of the world’s food supply, but since 2006 bee colonies in the United States have been dying off at an unprecedented rate. More recently the same “colony collapse disorder” has appeared in China, Egypt and Japan. Many suspect that the main cause is a widely used type of pesticides called neonicotinoids, but the evidence is not yet conclusive. The fact remains that one-third of the American bee population has disappeared in the past decade. If the losses spread and deepen, we may face serious food shortages. Then […]

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The Problem Isn’t That We Have Too Little Oil. We Have Too Much and are Cooking the Planet With It. In 1977 Isaac Asimov wrote of “The Nightmare Life Without Fuel.” Writing in the wake of the first Middle East oil shock, Asimov imagined cars and air conditioning as distant memories, cities mined for valuable minerals and hardware, and the last barrels of oil hoarded for agricultural and military purposes. A future of scarcity seemed in the cards after the 1979 revolution in Iran disrupted global supplies, reviving gas lines and rationing in the United States, and sending oil prices to a stratospheric $117 a barrel in today’s dollars. The U.S. economy plunged into recession for the second time in a decade. Inflation, food prices and unemployment all shot up. Energy-importing Third World nations were devastated as expensive crude depleted their treasuries even as the U.S. Federal Reserve jacked […]

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Iraqi onlookers stand next to a burnt car following a motorcycle bombing attack which killed at least eight people on September 19, 2014 in the northern city of Kirkuk.(Getty) For Kirkuk, its oil-rich surroundings have been more a curse than a blessing. The northern Iraqi city struck black gold in 1927, while still under the control of the British Empire, and became the country’s oil production powerhouse in the north. At its peak, its oil fields were pumping out 3.2 billion barrels per day, but this has since fallen sharply amid war and mismanagement by the former Iraqi dictator Saddam Hussein, who seized control in 1968. Kirkuk is in what is now Kurdistan, a semi-autonomous region of Iraq, and was for years a multi-ethnic city. Many Kurds, who make up the bulk of the 850,000 population, had arrived in Kirkuk in search of work in the city’s oil industry. […]

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In this life nothing is certain. Therefore I am not declaring, absolutely, that we are at peak oil, only that it is a near certainty. But I am putting my reputation on the line in making the claim that the period, September 2014 through August 2015 will be the year of Peak Oil. Below are my reasons for making this claim. First of all, Peak Oil is not a theory. The claim that Peak Oil is a theory is more than a little absurd. Fossil hydrocarbons were created from buried alga millions of years ago and they are finite in quantity. And as long as we keep extracting them in the millions of barrels per day, it is only common sense that one day we will reach a point where their extraction starts to decline. In fact most countries where oil is extracted are already in decline. So obviously […]

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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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