Category: Peak Oil

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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How does the economy really work? In my view, there are many erroneous theories in published literature. I have been investigating this topic and have come to the conclusion that both energy and debt play an extremely important role in an economic system. Once energy supply and other aspects of the economy start hitting diminishing returns, there is a serious chance that a debt implosion will bring the whole system down. In this post, I will look at the first piece of this story, relating to how the economy is tied to energy, and how the leveraging impact of cheap energy creates economic growth. Trying to tackle this topic is a daunting task. The subject crosses many fields of study, including anthropology, ecology, systems analysis, economics, and physics of a thermodynamically open system. It also involves reaching limits in a finite world. Most researchers have tackled the subject without […]

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Dow Jones Newswires By Gabriele Steinhauser The sharp drop in oil prices has already roiled markets and pummeled energy companies. But its impact on oil production and climate policies is likely to last years past the moment when prices have recovered. The shale boom in the U.S., where oil production has nearly doubled over the past 10 years, and the refusal of the Organization of the Petroleum Exporting Countries to cut output, have contributed to a glut on global energy markets. At the same time, low growth in Europe and emerging markets is holding down demand, upending long-held assumptions of scarcity and ever-increasing prices. "The expectations that have governed the world for over a decade have been overturned by a new reality," says Daniel Yergin, vice chairman of energy research firm IHS and author of several books on the global oil market. Since the beginning of the year, investment […]

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John Hofmeister attracted national attention in 2010 when he predicted that average U.S. gasoline prices would soar to $5 a gallon in 2012, thanks to rising crude oil prices. His forecast fell short, as the cost of filling up flirted with $4 in 2012, but never went higher. Now, with gasoline prices at $2.14, their lowest level since May 2009, the former president of Shell Oil is issuing another warning, telling motorists that their joy ride may end sooner than they think. “The next round of high prices is likely to start later this year, as crude rebounds to the $80s and $90s, perhaps pushing to the $100 level by late in the year or early next,” Hofmeister told me the other day after a trip to Calgary, where he was promoting natural gas as a transportation fuel. “The triggering mechanism will be global demand growth relative to how […]

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As oil prices continued to plunge last week, it was instructive to watch the disparate reactions of three governments whose whopping losses are likely to produce some of the biggest international stories of 2015. There was the panicked scrambling of Venezuelan President Nicolás Maduro, who skipped his own state of the union speech for a desperate world tour in search of loans or promises of $100 oil. He got neither, even as rumors flew back home about whether he would be allowed to stay in office on his return. Jackson Diehl is deputy editorial page editor of The Post. He is an editorial writer specializing in foreign affairs and writes a biweekly column that appears on Mondays. View Archive There was the cool response of Vladi­mir Putin, whose ministers announced drastic cuts in government spending — except for defense. Russia’s proxy forces in eastern Ukraine meanwhile launched a new offensive […]

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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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Photographer: Chris Ratcliffe/Bloomberg Saudi Arabia isn’t the nicest ally to have. The desert kingdom just handed out   a sentence of  1,000 lashes to a blogger for running a website devoted to freedom of speech. Not exactly the kind of regime we want to have in our circle of friends, especially once you figure in their financial support for Islamic State and other radical Islamist groups. But you go to war with the allies you have, not the allies you wish you had. And in the global oil price war against Russia and Iran, Saudi Arabia is the U.S.’s indispensable ally. By continuing to pump the black stuff at an undiminished rate, the Saudis are repeating the trick they pulled in the mid-’80s, allowing oil prices to plunge in response to Western supply increases, thus depriving their rival (Iran) and ours (Russia) of revenue — and, in the process, […]

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