Category: Peak Oil

General Ideas It was not long ago that $100 per barrel oil was accepted as the new normal. China’s strong economic growth (and energy demand) would continue apace, and OPEC and Saudi Arabia would continue to play the traditional role as swing producer in support of oil prices. Events have proved otherwise. Oil markets have entered a new period. Now it is supply, not demand, which is the key the factor, making not-so-distant discussions of “peak oil” seem very far gone. China’s economy, while still growing, has slowed. And by leaving oil prices to the market, OPEC has effectively ceded the role of de facto swing producer to a country that hardly expected it—the United States. Markets never cease in their ability to upend current expectations and confound established thinking. That is certainly the case for the world of energy in a year that has seen the rapid creation […]

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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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Peak oil isn’t what it used to be. That’s not simply because the theory of global oil supply peaking has been postponed courtesy of the U.S. production rebound, it is also because a second meaning to the expression is making a return, and that’s peak demand. A fresh glimpse of demand for oil peaking came last week in the release of the April edition of Oil Market Report by the International Energy Agency. While most interest was in oil supply, a natural focus given the glut which has depressed the price of oil, there was a more important factor in the report and that was the modest demand growth forecast from the agency. Sluggish Demand Growth The key figures were a 1 million barrel-day increase in worldwide oil supply during March to an 95.2 million barrels a day, and a 1.1 million barrel a day increase in demand to […]

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Oil historian and economist Daniel Yergin has a forecast for where the price of crude is headed: all over the place. The much debated shape of the oil-price curve will take the form of a W as crude is whipsawed by mixed signs from a rattled U.S. shale boom, while Saudi Arabia refuses to balance a global supply glut, Yergin said in an interview on Tuesday. As spending cuts are forecast to begin easing production from shale next month, the fate of world oil markets is largely in the hands of a myriad of U.S. wildcatters, all with different strategies and an unusual ability to respond quickly to changed circumstances. Ramping down will be quicker and easier than stepping up production as prices recover, said Yergin, vice chairman of IHS Inc. Increased supply will renew downward pressure on prices and volatility will be exacerbated by storage and investment decisions, […]

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Has The U.S. Reached “Peak Oil” At Current Price Levels? thumbnail Last night the EIA once again capitulated on the myth that rig counts don’t matter and the productivity of wells would largely offset, leaving the industry on a continuous path to higher output. The current consensus of 500,000 B/D additional growth in 2015 US production now appears very much at risk. Look how far we have come, folks, from all that media hysteria this past year. Yesterday, Reuters even wrote an article stating that the EIA prediction of a sequential decline in oil production in May vs. April would be the first, if proven, true prediction. Meanwhile, fact checking would indicate that this, in fact, occurred last week as reported here . In any event the EIA now thinks that production will decline 57,000 B/D in May counter to earlier expectations that the Permian would largely offset declines […]

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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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Oil companies have a knack for picking the bottom in crude prices, and history may be about to repeat itself. Traders and analysts are speculating that Royal Dutch Shell Plc’s takeover of BG Group Plc for $70 billion announced Wednesday may be the first in a wave of acquisitions as Big Oil seeks to drive out costs following the rout in oil. That happening would resemble the massive deals of the late 1990s that restructured the industry. As oil slid then, BP Plc bought Amoco Corp. for $56 billion in August 1998 and Exxon took over Mobil Corp. for $80 billion in December. Both were announced just weeks before Brent crude reached its trough of $9.55 a barrel. As the market began to recover, Spain’s Repsol SA acquired YPF of Argentina for some $15 billion and Total SA of France bought Elf Aquitaine for $52 billion. Chevron later scooped […]

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Peak Oil is back at least for now! U.S. oil futures soared after he Energy Information Administration (EIA) acknowledged that U.S. oil output will fall despite earlier predictions to the contrary only to fall back after the American Petroleum Institute reported a 12.2 million barrel increase in crude oil supply. The market seemed to ignore a prediction by the EIA that oil might fall $15 a barrel if Iranian oil came back onto the market. This comes against a back drop of a mega energy deal that may signal more deals to come and a consolidated market bottom. Let us start with EIA’s “Short Term Energy Outlook” that sent oil on a tear. “The reason was that the EIA said that U.S. crude oil production  is expected to peak this year in the second quarter and then decline in the third quarter, before picking up again toward the end […]

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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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It should seem obvious that it takes energy to get energy. And, when it takes more energy to get the energy we want, this usually spells higher prices since the energy inputs used cost more. Under such circumstances there is less energy left over for the rest of society to use, that is, for the non-energy gathering parts–the industrial, commercial and residential consumers of energy–than would otherwise be the case. It shouldn’t be surprising then that as fossil fuels, which provide more than 80 percent of the power modern society uses, become more energy intensive to extract and refine, there is a growing drag on economic activity as more and more of the economy’s resources are devoted simply to getting the energy we want. A more formal way of talking about this is Energy Return on Investment or EROI. The "energy return" is the energy we get for a […]

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