Category: Peak Oil

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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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 find investments […]

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WASHINGTON (Reuters) – U.S. private employers in April hired the fewest number of workers in more than a year, further diminishing hopes of a strong rebound in economic growth after the first-quarter slump. The tepid private job gains combined with other data on Wednesday showing a second straight quarterly decline in productivity make it less likely the U.S. Federal Reserve will raise interest rates in June as had been expected at the start of the year. "The data pile onto recent evidence suggesting increased odds that, by the time the June policy meeting rolls around, the hope of a great spring rebound in real growth will have faded," said Steve Blitz, chief economist at ITG Investment Research in New York. Private payrolls increased 169,000 last month, the smallest gain since January 2014, the ADP National Employment Report showed. That was well below economists’ expectations for an increase of 200,000 […]

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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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Money manager David Einhorn’s doomsday outlook for shale oil drillers so far is failing to resonate with investors. A pessimistic assessment of the industry by the president of Greenlight Capital Inc. on Monday briefly shook the stock of the companies Einhorn targeted, dropping EOG Resources Inc. by as much as 2.8 percent after he spoke out and Concho Resources Inc. by as much as 3.5 percent. By the end of the day, though, both companies recorded gains, probably reflecting continued investor confidence that oil’s price plunge from more than $100 a barrel in 2014 is spurring cost cuts and new drilling strategies in an industry long known for its profligate spending. Crude prices have risen by 36 percent since March 17, eliminating much of the decline of the preceding nine-month oil-market rout. The oil price drop “sped up the ‘reset’ process,” said Andrew Cosgrove, an energy analyst for Bloomberg […]

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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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Photo: Dhiraj Singh/Bloomberg News When it comes to oil demand, the conventional wisdom is clear: Population growth and a rising global middle class guarantee that demand—and prices—will rise over the coming decades. It is a story line that is almost universally accepted by investors, governments and industry alike. But like many such consensus views, it is one that should be treated with caution. The world’s economy is experiencing transformational changes that, I believe, will dramatically alter patterns of energy use over the next 20 years. Exponential gains in industrial productivity, software-assisted logistics, rapid urbanization, increased political turmoil in key regions of the developing world, and large bets on renewable energy are among the many factors that will combine to slow the previous breakneck growth for oil. The result, in my opinion, is as startling as it is world-changing: Global oil demand will peak within the next two decades. A […]

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