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Even BP admits, some existing oil reserves are unburnable

The idea of a carbon bubble — the scenario in which fossil fuel-related investments become “stranded assets” as the world moves away from fossil fuels — has been gaining mainstream credence in recent months. From coal communities seeking help to transition from fossil fuels to vastly improved renewables that are competing directly with carbon emitting fuels , there are good reasons to question the idea that fossil fuel demand will continue to grow in the coming decades. Still, I wasn’t expecting the latest development in the carbon bubble story. The new economics of oil As reported over at The Guardian, oil giant BP has just admitted that some existing fossil fuel reserves are unburnable , and that some oil will have to remain in the ground if we are to have any hope of keeping global climate change within “safe” (which, at this point, really just means “less dangerous”) […]

Posted On : Published By : Tom Whipple
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Is Peak Oil Just A Myth?

As Niels Bohr famously said: “predictions are difficult, especially about the future.” And they are doubly difficult if you are talking about the future of oil. The more uncertain the future, the more vehemently each side presents its case. For years a debate has raged about peak oil, the dreaded moment when we start running out of accessible oil reserves, a debate made only more heated by suspicions of vested interests. So environmental campaigners have been crying out that modern society is about to be plunged into darkness, while oil industry experts have blithely assured us that the oil is there, and they will fetch it for us. Even if it lies several miles under the Arctic seabed or has to be stripped from tar in Canada. Down Dale Now BP chief economist Spencer Dale, a former Bank of England policymaker, has thrown his reputation into the fray by […]

Posted On : Published By : Tom Whipple
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Oil unlikely to ever be fully exploited because of climate concerns – BP

BP’s chief economist says that burning existing fossil fuel reserves would not be consistent with limiting global warming to 2C, as governments have pledged to do. Photograph: Ben Stansall/AFP/Getty Images The world’s oil resources are unlikely to ever be fully exploited, BP has admitted, due to international concern about climate change. The statement, by the group’s chief economist, is the clearest acknowledgement yet by a major fossil fuel company that some coal, oil and gas will have to remain in the ground if dangerous global warming is to be avoided. “Oil is not likely to be exhausted,” said Spencer Dale in a speech in London . Dale, who chief economist at the Bank of England until 2014, said: “What has changed in recent years is the growing recognition [of] concerns about carbon emissions and climate change.” Scientists have warned that most existing fossil fuel reserves must stay in the […]

Posted On : Published By : ASPO-USA
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BP Smacks Down ‘Peak Oil’ Fears

Fear over the environmental impact of using oil, gas and coal reserves means we may never run out of untapped energy stores, according to a leading petroleum industry economist. “Concerns about carbon emissions and climate change mean that it is increasingly unlikely that the world’s reserves of oil will ever be exhausted,” BP Chief Economist Spencer Dale told the Society of Business Economists Tuesday. This means the relative price of oil will not necessarily increase overtime, reports Reuters. Spencer’s remarks come amid concerns that an oversupply of oil is pushing the price of crude back under $50 a barrel. Global oil demand is slipping, at a time when supply is high, The Wall Street Journal reports . This is putting downward pressure on oil prices. Consulting firm PVM oil broker David Hufton told The WSJ oil prices could be higher, “as long as OPEC do not produce more than […]

Posted On : Published By : Tom Whipple
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Peak oil round up

2015 Could Be The Year Of Peak Oil … I am now more convinced than ever that 2015 will see the peak in world crude oil production. I have very closely studied the charts of every producing nation and my prognosis is based on that study. I see many nations in steep decline and most every other nation peaking now, or in the last couple of years, or very near their peak today. These include the world’s three largest producers, Russia, Saudi Arabia and the USA. Oil Mountain (Image: D. Bacon/Shutterstock/Economist) China Peak Oil: 2015 Is the Year Domestic production looks set to peak, with some profound implications for the world market. Intense focus on the North American shale boom, Saudi Arabia, and ISIS obscures an important emerging energy trend: China’s oil production is peaking. This has profound implications for the world oil market, because China is not just […]

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The Promise and Peril of Cheap Oil

Everyone likes $2 gasoline. But what if it’s bad for the long-term growth of the U.S. economy — and for global stability? The U.S. House of Representatives is expected to vote on Friday to do something that would have been unthinkable only a few years ago: lift the restrictions on exporting domestically produced crude oil that have been on the books since the 1970s. It’s a topic that is definitely heating up in Washington: During a Senate hearing Tuesday on energy security, in which I testified about the importance of ensuring that the 40-year-old Strategic Petroleum Reserve can continue to be effective in an emergency , the questioning was overwhelmed by senators asking U.S. Energy Secretary Ernest Moniz to lift the restriction. The move, which many U.S. oil producers cheer, comes at a bleak moment for them. A combination of surging oil supply and economic weakness sent oil prices […]

Posted On : Published By : Tom Whipple
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Oil and the Global Economy

How important is oil to the future of the global economy? The remarkable economic expansion of in the United States and other industrial nations over the past century or more has been fueled by a steadily growing supply of low-cost energy—mostly from fossil fuels—oil in particular which accounts for more global energy consumption than any other source. But there is growing uncertainty whether this trend will continue as it has in the past. How will shifting trends regarding the cost, demand, and supply for oil affect the global economy and the outlook for investment and economic growth? Guests: Stephen P.A. Brown – professor of economics and director, Center for Business and Economic Research , Lee Business School, University of Nevada, Las Vegas; visiting fellow, Resources for the Future ; associate editor, Energy Policy Mark Lewis – senior analyst for energy, climate, and sustainability research, Kepler Cheuvreux ; former head […]

Posted On : Published By : Tom Whipple
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Why Are The IMF, The UN, The BIS And Citibank All Warning That An Economic Crisis Could Be Imminent?

The warnings are getting louder. Is anybody listening? For months, I have been documenting on my website how the global financial system is absolutely primed for a crisis, and now some of the most important financial institutions in the entire world are warning about the exact same thing. For example, this week I was stunned to see that the Telegraph had published an article with the following ominous headline: “ $3 trillion corporate credit crunch looms as debtors face day of reckoning, says IMF “. And actually what we are heading for would more accurately be described as a “credit freeze” or a “credit panic”, but a “credit crunch” will definitely work for now. The IMF is warning that the “dangerous over-leveraging” that we have been witnessing “threatens to unleash a wave of defaults” all across the globe… Governments and central banks risk tipping the world into a fresh […]

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Forget Peak Oil – It’s All About Peak Population Growth

Summary Global annual population growth peaked in 1988 and is decelerating. Global annual population growth is estimated to be back to 1950 levels by 2050 but the bulk of "growth" will be among 65+ year olds living longer…not greater births. Substituting lower interest rates and encouraging more debt for declining population growth (consumption) was and is a tragic error by our central bankers. The idea that global population growth will perpetually drive increasing demand for food, natural resources, real estate, consumer goods, and global trade is a common theme. This idea of ever greater demand drives most investors thinking and actions. The premise the world currently operates under is that demand (consumption) will grow driven by population increases coupled with wage increases and be magnified by access to credit. The resultant growth will allow rapidly growing debt to be serviced / paid by even more rapidly growing global trade. […]

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Oil Depletion Likely Without Technology

Without the latest technologies to increase production, there is a good chance that Iranian oilfields will be exhausted in the near future, says the deputy for technology and international affairs at the Research Institute of Petroleum Industry. “Even if the country focuses all its energy on completing the value chain in oil and gas industries, without new drilling techniques to exploit our reserve of nearly 650 billion barrels of crude oil, we will still fail to harvest the maximum capacity of oilfields,” Amir Abbas Hosseini told ILNA. The official had previously announced that the institute is seeking a strategic mechanism to raise oil extraction rate by nearly 11% and that the current extraction rate is a long way from the target rate of 35%, because extraction procedures are lacking know-how. “Failing to do so would lead to a production decline through the second half of the operational oilfields’ lifecycle […]

Posted On : Published By : Tom Whipple