Category: Peak Oil

Three things you shouldn’t miss this week Global riot epidemic due to demise of cheap fossil fuels  – From South America to South Asia, a new age of unrest unfolds as industrial civilisation transitions to post-carbon reality.   UK oil and gas production in terminal decline?  Offshore production by field:  http://crudeoilpeak.info/uk-peak   The Energy Transition Tipping Point is Here  – The economic foundations for fossil fuel investment collapse as the business case for renewables builds.   Diplomatic efforts are underway to diffuse tensions between Russia and the West following the overthrow of Ukrainian President Yanukovych. Should tensions escalate, one risk is the disruption of gas supplies from Russia to Europe via the Ukraine.   A standoff between Russia and Ukraine following the Orange Revolution saw gas supplies disrupted in both January 2006 and early 2009. Europe is now better placed to […]

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The Sydney Morning Herald published the following article 2 days after Qantas CEO Alan Joyce announced a 1 st half year loss of $252 million and job cuts of 5,000. Mayday: how Qantas went from national icon to corporate tragedy Qantas is a company of tribes at war with itself, and anyone who questions its strategy. It also is suffering from a case of the Boy Who Cried Wolf after so many years of warning that it was close to collapse unless the government bowed to its wishes. At one time, a phrase was coined by Dixon known as “constant-shock syndrome”. http://www.smh.com.au/business/aviation/mayday-how-qantas-went-from-national-icon-to-corporate-tragedy-20140228-33rax.html The SMH article describes how Chairman Leigh Clifford selected Alan Joyce as successor for CEO Geoff Dixon in May 2008. That was the month when oil prices were skyrocketing towards $130 a barrel as a result of extra demand from China for the Olympic Games. After 2 […]

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PARIS, March 6 (UPI) — The International Energy Agency said it is keeping close watch over natural gas transits through Ukraine to Europe, but hasn’t observed a physical disruption. Russian Prime Minister Dmitry Medvedev this week warned Ukraine may face consequences because of its outstanding debt obligations to Russian energy company Gazprom. Europe gets about a quarter of its natural gas from Russia, though the majority of that runs through the Soviet-era pipeline network in Ukraine. Gazprom in 2009 cut natural gas supplies through Ukraine because of debt issues, though IEA said in a briefing Wednesday there has been "no physical disruption in supplies of crude oil or natural gas transiting Ukraine to Europe." The European community in response to the 2009 debt row started looking to diversify its energy market. IEA said gas transit through Ukraine to Europe increased 4.3 percent from 2012 to 2.9 trillion cubic feet, […]

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Page added on March 6, 2014 Russia’s invasion of the Crimea is a tipping point event that will further spur the North American oil boom.  The European Union (EU) and United Statesin 2008 threatened toslap economic sanctions on Russia for invading Georgia.  But after a while the criticism faded and sanctions threats were quietly dropped, because the EU is almost entirely reliant on Russia for energy supplies. A similar situation is unfolding today as the EU and U.S. are again making false threats they will to stop exports of Russian oil and gas as punishment for invading the Ukraine.  But due to the latest humiliation by the Russians, a consensus is emerging that will demand the United States and its North American partners “drill baby, drill” for national security. Twenty years ago on January 1st the United States, Mexico, and Canada implemented the North American Free Trade Agreement. The […]

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For years, meaning until the arrival of U.S. shale production, much ink was spilled on the concept of “peak oil” — the argument that the world was fast approaching an absolute maximum of crude oil that can be produced on a  daily basis. Shale production has put the kabosh on that for the time being, but there’s another “peak” to argue about, and it’s peak demand. Oil consumption in Western Europe, Japan and the United States has  been declining since about 2005. Have we hit “peak demand?” Not hardly, at least not worldwide, agreed three panelists at the ongoing IHS/CERAWeek energy conference in Houston. Demand from Asia and the developing world will more than offset declines in OECD nations, said the panelists, all refiners. Bill Klesse, CEO of San Antonio-based Valero Energy, said world crude oil demand can be expected to grow about 1 million barrels per year through 2025. […]

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Quiz: What will cause world oil supply to fall? Too little oil in the ground Oil prices are too low for oil producers Oil prices are too high for oil consumers leading to recession, debt defaults, and ultimately a cut back in credit availability and very low oil prices Oil exporters are subject to civil unrest and overthrow of governments, due to low prices and/or depleting reserves Lack of money (and physical resources that might be purchased with this money) to pull oil out of the ground. Pollution related issues–too much smog in China; too many problems with fracking; too many problems with CO2. The financial current system fails, and can only be replaced by one that allows much less debt. Oil prices remain too low under such a system. In my view, any answer other that the first one is likely to be at least partially right. Ultimately, […]

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World stock markets may be over-valuing companies with fossil fuel assets that may be unburnable, UK lawmakers warned Thursday. The UK’s Environmental Audit Committee released a report warning that over-priced fossil fuel assets pose a systemic risk to global markets. "The UK government and Bank of England must not be complacent about the risks of carbon exposure in the world economy," said committee chair and member of parliament Joan Walley. "Financial stability could be threatened if shares in fossil fuel companies turn out to be over-valued because the bulk of their oil, coal and gas reserves cannot be burnt without further destabilizing the climate," she said. "The record-breaking extreme weather events causing chaos across the globe should be a wake-up call," said Walley. "The transition to a low carbon economy will be much more painful if we wait until there is a climate crisis […]

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An observation worth noting … and pondering, from Mark Lewis (links in original): Oil market commentators increasingly dismiss the very idea of supply-side constraints on the oil market, pointing to the recent surge in light-tight oil production from US shale deposits and the existence of vast shale formations elsewhere in the world…. But does this peak demand theory bear scrutiny? [F]rom data for 2013 released by the EIA recently, it is now clear that US demand not only increased last year, but accelerated rapidly over the course of the year. All of [the data reported by the author] implies that the reduction in US oil demand over 2008-12 was not so much structural as due mainly to the weakness of the US economy following the global financial crisis, and the tightness of the local oil market until recently. As the economy has started […]

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For years, meaning until the arrival of U.S. shale production, much ink was spilled on the concept of "peak oil" — the argument that the world was fast approaching an absolute maximum of crude oil that can be produced on a  daily basis. Shale production has put the kabosh on that for the time being, but there’s another "peak" to argue about, and it’s peak demand. Oil consumption in Western Europe, Japan and the United States has  been declining since about 2005. Have we hit "peak demand?" Not hardly, at least not worldwide, agreed three panelists at the ongoing IHS/CERAWeek energy conference in Houston. Demand from Asia and the developing world will more than offset declines in OECD nations, said the panelists, all refiners. Bill Klesse, CEO of San Antonio-based Valero Energy, said world crude oil demand can be expected to grow about 1 million barrels per year through 2025. […]

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Steve Kopits, in his recent presentation at Columbia University , ridiculed the IEA’s often used term a “ Call on OPEC “. That is, the IEA looks at the world oil supply and if they see a supply shortage looming on the horizon they then issue a “Call on OPEC” to supply x number of extra barrels and fill that gap. But the next time the IEA issues such a call can OPEC deliver? Or, is OPEC already producing every barrel they possibly can. One thing for sure, there are eight OPEC countries that are definitely producing every barrel they possibly can, those countries are Algeria, Angola, Ecuador, Iran, Libya, Nigeria, Qatar and Venezuela. The chart below is the combined production of those 8 nations. All charts in this post are “Crude Only” in kb/d with the last data point Jan. 2014. There can be no doubt […]

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