Category: Peak Oil

Global Systemic Financial Crisis 2015: Geopolitics, Oil and Currency Markets thumbnail For almost two years, by combining various points of view (speculative, geopolitical, technological, economic, strategic and monetary…), we have continued to anticipate a major crisis in the entire oil sector. Today, no one doubts the fact that we are actually at that point, and the GEAB must therefore anticipate the consequences of this veritable atomic bomb, which has begun to blow up all the old system’s pillars: everything which we have known, international currencies, financial markets, the US, the Western alliance, world governance, democracy, etc. Global systemic crisis: the end of the West we have known since 1945 Here, we would like to look back on a historic GEAB anticipation, that of Franck Biancheri in February 2006, which announced the beginning of the global systemic crisis under the title “the end of the West we have known since […]

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Oil storm clouds image via shutterstock. Reproduced at Resilience.org with permission. Oil prices have fallen by half since late June. This is a significant development for the oil industry and for the global economy, though no one knows exactly how either the industry or the economy will respond in the long run. Since it’s almost the end of the year, perhaps this is a good time to stop and ask: (1) Why is this happening? (2) Who wins and who loses over the short term?, and (3) What will be the impacts on oil production in 2015? 1. Why is this happening? Euan Mearns does a good job of explaining the oil price crash here . Briefly, demand for oil is softening (notably in China, Japan, and Europe) because economic growth is faltering . Meanwhile, the US is importing less petroleum because domestic supplies are increasing—almost entirely due to […]

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A couple of years back, I attended a presentation by Tom Eizember, Exxon’s head of strategic planning.   During the presentation, Eizember asked how many in the audience believed in peak oil, and I raised my hand.  I believe I was the only one.  Exxon does not subscribe to peak oil And yet.  Exxon has issued its new Outlook (which is well worth a look).  One of the interesting features of this report is its view of conventional oil production, comprising traditional onshore and offshore / deepwater production.  In Exxon’s view, conventional production peaked around 2005 and is not projected to revisit this level until, at best, around 2040.  This is not particularly controversial, but it is interesting to see Exxon acknowledge it.  And it’s important for our understanding of the long term outlook for the oil supply and oil prices, which I consider in greater detail below. Exxon Global Oil Supply Outlook 2015 Source: Exxon […]

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Even some Opec members are fixing their spot crude contract prices on the assumption that contango is already under way According to the International Energy Agency, growth in world demand for oil will next year again fall below the critical figure of 1m barrels per day, reaching 93.3m bpd in total Photo: Alamy Contango, or not contango? This is perhaps the most important question facing oil markets right now. In the space of a week, the global three top energy organisations have downgraded their forecasts for the amount of oil they think the world will need next year to fuel the economy. These revisions are significant in the context of understanding why the price of oil has fallen so dramatically in such a short period of time — down 45pc since June — and helping to predict accurately where it is likely to be heading in the future. One […]

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Currently lower oil prices due to a combination of increasing oil supplies and subdued demand come at a high cost to the environment and the climate. Additional oil supplies are exclusively from fracking tight oil in the US and from Canadian tar sands. Fig 1: Production of US tight oil, Canadian tar sands and rest-of-world crude The graph shows that crude oil production outside the US and Canada is on a bumpy plateau since 2005. In fact, after 2011, rest-of-world crude production declined like in 2005-2007: Fig 2: Overlay of rest-of-world crude production 2005/07 and 2012/14 periods Let’s have a more detailed look at the changes to crude oil production since 2001: Fig 3: Incremental crude oil production Jan 2001 – Aug 2014 All data are from here:  http://www.eia.gov/cfapps/ipdbproject/IEDIndex3.cfm Incremental production is calculated as total crude production minus the minimum production in each country in the period under consideration, […]

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A couple of years back, I attended a presentation by Tom Eizember, Exxon’s head of strategic planning.   During the presentation, Eizember asked how many in the audience believed in peak oil, and I raised my hand.  I believe I was the only one.  Exxon does not subscribe to peak oil And yet.  Exxon has issued its new Outlook (which is well worth a look).  One of the interesting features of this report is its view of conventional oil production, comprising traditional onshore and offshore / deepwater production.  In Exxon’s view, conventional production peaked around 2005 and is not projected to revisit this level until, at best, around 2040.  This is not particularly controversial, but it is interesting to see Exxon acknowledge it.  And it’s important for our understanding of the long term outlook for the oil supply and oil prices, which I consider in greater detail below. Exxon Global Oil Supply Outlook 2015 Source: Exxon […]

Click here to view full article at peakoil.com

Red oil barrels image via ezioman/flickr. Creative Commons 2.0 license. Three things you shouldn’t miss this week Chart:  Oil production break even prices: Article:   Oil price plunge means survival of fittest  – Crude at $70 puts at least 1.5m b/d of projects for 2016 at risk Article:   Fracking could carry unforeseen risks as thalidomide and asbestos did, says report produced by Government Chief Scientist  – Historic innovations that have been adopted too hastily with grave unforeseen impacts provide cautionary examples for potential side effects of fracking. The price of oil crashed below $65/barrel this week, its lowest level since 2009. The speed of the fall, from $100/barrel as recently as September, has caused mayhem in the financial markets. The price drop may be seen by some as a Christmas present for motorists, but for oil companies already struggling with spiralling costs, and oil producing nations trying to balance state budgets, this […]

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Want to dazzle party guests this holiday season with a data-backed argument that the US oil boom may have peaked? Well, the US Energy Information Administration has a report you should probably read. Want to shut up that obnoxious blowhard who keeps using EIA data to support his argument that the glory days of US oil may have gone by? Want some government data of your own to defend your claim that we have yet to see the peak of US oil production? I have good news: You can use the same report . Last week, the EIA released its annual estimate of recoverable US crude oil and lease condensate in the US, which is based on engineering and geologic data and factors current economic and operating conditions heavily into its assessments. In short: if potential oil plays make no economic sense for an operator, they are not seen by […]

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With the on-going drop in oil prices —down from around $100 a barrel this summer, to below $70 at this writing—I’ve been closely following various assessments of what this means. How long will prices remain low? What impact will this have on the United States’ oil boom?  I’ve been curious to see how the U.S. Energy Information Administration (EIA)—the data-collection and forecasting arm of the Department of Energy—might adjust its forecasts in response to the oil price drop. Yesterday EIA issued its latest Short-Term Energy Outlook (STEO), a monthly report that gives forecasts for the following year or two. The verdict is: Nothing will change. As The Hill put it: “ Low oil prices won’t hurt US drilling, feds say .” Sort of. Below is the price drop so far, and EIA’s expectation that it will persist at least through the end of 2015. Figure 1 Figure 1 This […]

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The media is replete with stories of low oil prices killing the shale revolution.  This is not going to happen, and here’s why: the world remains dependent on US shale oil production growth. We at Princeton Energy estimate that oil demand should grow at around 1.6 million b/d  per year at $80/b, on a Brent basis, with that demand improvement becoming evident from the second half of 2015. Now, where would supply growth come from to meet that demand? It could come from Brazil and Iraq for starters.  Brazil’s offshore program is finally finding its legs, and production has been increasing at a pace of perhaps 200,000 b/d per year. Iraq, assuming it does not implode into civil war, could provide as much with some luck.  And perhaps another 200,000 b/d could come from various other sources, for example, from the US Gulf of Mexico in 2015.  And that’s […]

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