Category: Peak Oil

  1.  Oil and the Global Economy Last week’s trading left futures prices little changed. New York oil closed Friday at $99.99 a barrel and London closed at $107.89. As has been the case for several weeks, the US crude inventory, weak demand, and the Ukrainian and Libyan situations were the main drivers of the oil markets. US crude imports were down markedly the week before last leading to a drop in inventories along the Gulf coast and even total US crude inventories for the first time in many weeks. Some analysts are wondering if Gulf Coast storage facilities can absorb much more oil. Natural gas futures dropped sharply on Thursday after the inventory report showed that the warmer weather has led to natural gas being injected into storage caverns at close to the normal pace. Futures prices are down about 30 cents per million from the $4.85 level […]

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[The] increased oil expenditure is drawing money away from the rest of the economy. Overall, were it not for the price increase [from the historical average of $25.00 per barrel], the US would have an extra $1.5 billion per day to spend in the broader economy, or $543 billion per year. Instead, all that money is being spent on expensive oil, which is distorting the economy. Is it any wonder oil-dependent economies are struggling to grow their economies? Could it be that expensive oil signifies the twilight of industrial growth, as we have known it…? At the current price of $105 …, the world spends $9.45 billion per day on oil, or $3.5 trillion per year. This is a difference of $7.2 billion every day, an extra cost to the global economy which is largely a result of crude oil having peaked. It lacks credibility to pronounce the death […]

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Our lead story: This week Stanford said that it would divest all of its investments in coal mining companies, becoming the wealthiest US university to pledge divestment from sectors of the fossil fuel industry. Erin gives you her take on the situation. For our interviews today, we look at peak oil theory with Richard Heinberg and James Hamilton. Heinberg argues that we have reached peak oil supply and that will have major economic consequences for our future prospects of economic growth. Hamilton on the other hand sees this as more of a demand issue. Take a look. Finally in today’s Big Deal, Edward Harrison and Erin take a look at the return of the subprime auto loan market. Is this another example of perverse incentives in the search for yield? Edward gives you his take.

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The most lasting change in the U.S. energy landscape may not be that we’re producing more oil — but that we’re using less. Demand for oil has fallen in recent years, as Americans drive less and buy more fuel-efficient cars. Daily consumption is down nearly 2 million barrels since 2005, a 9 percent decline. The drop is small in percentage terms, but it represents a remarkable shift, one that few people saw coming. For most of the post-World War II era, Americans burned more oil each year, a trend broken only briefly by the price shocks of the late 1970s. This time, the shift appears to be more lasting: In a new report released this week , the Energy Information Administration (EIA) said the U.S. will burn slightly less oil in 2040 than it did in 2010. Overall energy consumption per person is set to fall even more steeply, to […]

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[The] increased oil expenditure is drawing money away from the rest of the economy. Overall, were it not for the price increase [from the historical average of $25.00 per barrel], the US would have an extra $1.5 billion per day to spend in the broader economy, or $543 billion per year. Instead, all that money is being spent on expensive oil, which is distorting the economy. Is it any wonder oil-dependent economies are struggling to grow their economies? Could it be that expensive oil signifies the twilight of industrial growth, as we have known it…? At the current price of $105 …, the world spends $9.45 billion per day on oil, or $3.5 trillion per year. This is a difference of $7.2 billion every day, an extra cost to the global economy which is largely a result of crude oil having peaked. It lacks credibility to pronounce the death […]

Click here to view full article at peakoil.com

Why Oil Prices Haven’t Gone Crazy By Matthew Philips Bloomberg Businessweek Illustration by 731 The oil markets have plenty of reasons to be spooked. In Libya, home to Africa’s largest reserves, production has fallen more than 80 percent since militias seized control of the country’s biggest ports last summer. Most of Iran’s oil remains trapped as well. Sanctions aimed at punishing Iran for its nuclear weapons program have crippled its crude exports by 1.5 million barrels a day. Nigeria is in the midst of its worst oil crisis in years: Rising violence, plus rampant sabotage and theft, have knocked out about 300,000 barrels of oil output a day. In Venezuela, which has the world’s largest oil reserves, production has remained unchanged after years of underinvestment. Political chaos and violence are keeping 3.5 million barrels of daily oil production off the market, according to estimates by Citigroup (C). With tensions […]

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For oil executives there are few things more exciting than expensive, large-scale projects aimed at pumping more of the black gold. That doesn’t mean investors in oil majors should approve. Large oil companies are betting up to $1.1 trillion on “high-risk” oil projects over the next decade, according to London-based think tank The Carbon Tracker Initiative . Investors, it says, should question the assumptions underpinning that spending. “Many oil companies are betting on a high demand and price scenario,” said James Leaton, research director at the CTI, a group that lobbies to change the evaluation of carbon-intensive projects. “Investors need get ahead of the carbon supply cost curve to ensure capital is not being wasted.” The CTI said it was especially concerned about projects which need oil prices to stay above $95 per barrel in order to remain profitable. Among the companies with the highest exposure […]

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In February, oil production in Texas hit a 34-year high , with combined oil and condensate volumes exceeding 2.9 million barrels of oil per day.  For the first time in memory, Texas now produces more than 36% of all the oil produced in the United States, and if it were a separate country, Texas would now rank as the 8th largest oil producing nation on earth.  Wow. We see endless speculation about how long we should expect the current boom in shale oil and natural gas that is happening in Texas and throughout much of the United States to last. Prophets of doom like proponents of “Peak Oil” theory and radical anti-economic growth activists like Bill McKibben say it’s all a “bubble” that will burst at any moment. Others actually involved in the development of shale resources tend to believe the correct answer today will be some variation on […]

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In February, oil production in Texas hit a 34-year high , with combined oil and condensate volumes exceeding 2.9 million barrels of oil per day.  For the first time in memory, Texas now produces more than 36% of all the oil produced in the United States, and if it were a separate country, Texas would now rank as the 8th largest oil producing nation on earth.  Wow. We see endless speculation about how long we should expect the current boom in shale oil and natural gas that is happening in Texas and throughout much of the United States to last. Prophets of doom like proponents of “Peak Oil” theory and radical anti-economic growth activists like Bill McKibben say it’s all a “bubble” that will burst at any moment. Others actually involved in the development of shale resources tend to believe the correct answer today will be some variation on […]

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Here’s the good news. We probably don’t have to worry about peak oil just yet, as it isn’t going to run out anytime soon. The bad news is, as the IPCC has recently reported , we can’t afford the costs of what liberating all that carbon into the Earth’s atmosphere would do to the climate. So we will have to leave it in the ground and come up with alternatives fast. The really bad news is that we may not even have to worry about peak oil or dangerous climate change – instead we can fret over peak phosphorous . Unlike moving from our current dependence on fossil fuels, there is no alternative to phosphorus and if it runs out our global food production system would grind to a halt. is present in all cells in all forms of life because it makes up part of the backbone of […]

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