http://www.guardian.co.uk/business/2009/oct/19/oil-prices-rise-supply-warning-report
QuoteWorld oil prices hit their highest point for a year yesterday, as a major new report urged governments around the world to take drastic action to head off an approaching oil supply crunch.
US light crude futures pushed above $79 a barrel, supported by the view that a recovering world economy would raise demand for crude. Oil prices have more than doubled from the low point they hit in the spring, but are still around half the all-time high of nearly $150 a barrel they reached in early summer last year.
Analysts have been surprised at the recent resilience of oil prices given the impact on energy demand of the global recession. In spite of this year's volatility in the oil price, the underlying trend for a decade has been for it to rise steadily.
A report from the non-governmental organisation Global Witness â€" famous for its exposé of so-called "blood diamonds" â€" pointed to an impending supply shock that could be so severe that many of the world's poor countries would simply be shut off from the world of energy by sky-high prices.
Two years in the preparation, Global Witness's report, Heads in the Sand, accused governments of ignoring the fact that the world could soon start to run short of oil. This would lead to huge consequences in terms of price shocks and much higher levels of violence around the world than last year's food riots.
"There is a train crash about to happen from an energy point of view. But politicians everywhere seem to have entirely missed the scale of the problem," said the report's author, Simon Taylor.
"We are all addicted to oil but if you look at the mathematics of the problem, they simply don't add up in terms of future supply and demand."
The report went through the latest figures from the oil industry and the Paris-based International Energy Agency, which last year drastically reduced its estimate of the available oil.
The IEA figures showed there could be a gap of 7m barrels a day between supply and demand by 2015. That represents about 8% of the expected world demand by then of 91m barrels a day.
The IEA expects production from existing oilfields to fall by 50% between now and 2020 and warned the world needs to find an additional 64m barrels a day of capacity by 2030 â€" equivalent to six times current Saudi Arabian production.
But Global Witness took issue with the IEA's recommendation that the oil industry spend $450bn a year chasing these supplies, many of which may well not be there. Because of the demands of climate change, the report argued, the money would be better invested in moving rapidly to a post-oil world of renewable energy and conservation.
Taylor said even the new IEA projections of how much new oil the world would discover were likely to be over-optimistic. He said the so-called "big" oil discoveries of the last few years added up to nothing like the "discovery rate" needed to replace the world's dwindling supplies from existing fields. They have totalled around 16bn barrels, or only around 1.7m barrels a day, once up and running.
The report said that between 2005 and 2008, global oil production ceased to grow in spite of widespread investment and rising prices, which should normally have brought forth a big rise in supply. It notes that the biggest year for new discoveries was 1965, since when they have been falling. Global oil production overtook new discoveries in 1984 and has outpaced them ever since.
It also dismissed as myth a widely held expectation that tar sands in Canada could fill the supply gap. Tar sands are unlikely ever to yield more than 3-4m barrels a day, equivalent to the pace at which existing fields are declining every year.
Taylor said the four key issues about oil â€" declining output, declining discoveries, increasing demand and insufficient projects in the pipeline â€" have been apparent for many years.
"But governments and multilateral agencies have failed to recognise the imminence and scale of the global oil supply crunch, and most of them remain completely unprepared for its consequences," he said.
"There has been a decade of dithering and it is now too late to avoid the consequences unless the authorities move like there is no tomorrow."
Dr Jeremy Leggett, author of books on peak oil and convenor of the UK Industry Taskforce on Peak Oil and Energy Security, said: "A steep premature descent in global oil production would be worse than the credit crunch in terms of economic impact. Unlike the credit crunch, however, the peak oil risk assessment involves big companies sounding the alarm alongside organisations like Global Witness."
Quote..."There is a train crash about to happen from an energy point of view. But politicians everywhere seem to have entirely missed the scale of the problem," said the report's author, Simon Taylor.
"We are all addicted to oil but if you look at the mathematics of the problem, they simply don't add up in terms of future supply and demand."
The report went through the latest figures from the oil industry and the Paris-based International Energy Agency, which last year drastically reduced its estimate of the available oil.
The IEA figures showed there could be a gap of 7m barrels a day between supply and demand by 2015. That represents about 8% of the expected world demand by then of 91m barrels a day.
The IEA expects production from existing oilfields to fall by 50% between now and 2020 and warned the world needs to find an additional 64m barrels a day of capacity by 2030 â€" equivalent to six times current Saudi Arabian production....
...Taylor said the four key issues about oil â€" declining output, declining discoveries, increasing demand and insufficient projects in the pipeline â€" have been apparent for many years.
"But governments and multilateral agencies have failed to recognise the imminence and scale of the global oil supply crunch, and most of them remain completely unprepared for its consequences," he said.
"There has been a decade of dithering and it is now too late to avoid the consequences unless the authorities move like there is no tomorrow."
This is the crux of T. Boone Pickens crusade and exactly mirrors the underpinnings of his proposals.
See: http://www.pickensplan.com/
Quote from: stjr on October 20, 2009, 09:20:57 PM
Quote..."There is a train crash about to happen from an energy point of view. But politicians everywhere seem to have entirely missed the scale of the problem," said the report's author, Simon Taylor.
"We are all addicted to oil but if you look at the mathematics of the problem, they simply don't add up in terms of future supply and demand."
The report went through the latest figures from the oil industry and the Paris-based International Energy Agency, which last year drastically reduced its estimate of the available oil.
The IEA figures showed there could be a gap of 7m barrels a day between supply and demand by 2015. That represents about 8% of the expected world demand by then of 91m barrels a day.
The IEA expects production from existing oilfields to fall by 50% between now and 2020 and warned the world needs to find an additional 64m barrels a day of capacity by 2030 â€" equivalent to six times current Saudi Arabian production....
...Taylor said the four key issues about oil â€" declining output, declining discoveries, increasing demand and insufficient projects in the pipeline â€" have been apparent for many years.
"But governments and multilateral agencies have failed to recognise the imminence and scale of the global oil supply crunch, and most of them remain completely unprepared for its consequences," he said.
"There has been a decade of dithering and it is now too late to avoid the consequences unless the authorities move like there is no tomorrow."
This is the crux of T. Boone Pickens crusade and exactly mirrors the underpinnings of his proposals.
See: http://www.pickensplan.com/
So how much will the government subsides make T. boone, what happened to his wind farms in texas. I f I remember correctly he discovered that there were in fact no transmission line from the farm to the consumers. Nothing that "the ones" subsides won't take care of.
Quote from: civil42806 on October 20, 2009, 09:27:17 PM
So how much will the government subsides make T. boone, what happened to his wind farms in texas. I f I remember correctly he discovered that there were in fact no transmission line from the farm to the consumers. Nothing that "the ones" subsides won't take care of.
Let's face it, Civil, no matter what policy we follow, there will be winners and losers.
Between the conspiracies to destroy mass transit, promote the automobile, build roads ad infinitum, and promote urban sprawl to assure all of these things, all at the expense of the taxpayers, we have been favoring the oil companies for years. Add the bargain government leases of federal properties, our propensity to go to war in any country in which they have a vested oil interest, favorable tax policies for depletion, etc., and the oil industry is the clear winner with coal not far behind.
So, the question is what is truly best for America's future? If it is wind, solar, nuclear, natural gas, whatever, what is best regardless of who benefits?
If, coincidentally, Picken's has the aptitude and foresight to bet on the best course, or, put another way, put his money where his mouth is as an expression of his convictions, so be it. He isn't trying to hide the fact. The oil companies and every one of us has the same opportunity to follow in his footsteps by deploying our investment dollars in the stocks of companies that benefit from these actions.
As stated in this article and by Pickens, oil is clearly NOT in our future. The sooner we recognize that, the better.
There's no supply crunch. Just another excuse to raise prices.
Heights Unknown
Quote from: heights unknown on October 20, 2009, 11:05:53 PM
There's no supply crunch. Just another excuse to raise prices.
Heights Unknown
:-X This may be true but during this time of the year a lot of oil companies change from summer fuel over to winter fuel. And since we have no way of truly finding out, we must bend over and take it. :P
QuoteThere's no supply crunch. Just another excuse to raise prices.
I think there is... but it is our own fault. WE must not... under any circumstance... exploit our own supplies of oil.
T. Boone Pickens has made literally billions of dollars in the oil business. He is a geologist by training and has been following oil for sixty of his eighty years. When HE says we have a looming supply problem, I'm listening. He isn't just a theoretical prognosticator.
He says that drilling for domestic oil would only provide a drop in the bucket and that instead we need to drill for our abundant supply of natural gas for a "bridge" solution for fuel until we can come up with renewable resources for fuel.
The technology for using natural gas as a motor fuel is available and well proven. It would be a far more reliable and less costly transition than to try to go directly to electric or hydrogen powered vehicles.
Once again... I do not disagree... but I keep hearing the term "Drops in a bucket". This term is misleading. I contend we need all the drops we can get. Many countries... all over the world are looking for and exploiting those "drops" and when all put together will add a considerable amount to the "bucket". I wholly advocate the pursuit of natural gas and all the other "new" technologies and energy sources but ignoring or dismissing our NEED for reliable oil is folly.
Quote from: heights unknown on October 20, 2009, 11:05:53 PM
There's no supply crunch. Just another excuse to raise prices.
There is no supply crunch... currently. Fundamentals for the oil market show that the recent rally was not based on supply and demand economics, but investor sentiment sparked by positive earnings reports from companies and optimism towards the economy. If anything, I think the price will correct down briefly before any significant positive move.
I can't speak for the future of prices or consumption, but the title of this thread is inaccurate. Just SDare trying to stir the pot again.
Quote from: BridgeTroll on October 21, 2009, 09:49:33 AM
I contend we need all the drops we can get. Many countries... all over the world are looking for and exploiting those "drops" and when all put together will add a considerable amount to the "bucket".
Quote from: Captain Zissou on October 21, 2009, 09:53:40 AM
There is no supply crunch... currently.
Guys, read the article Stephen posted. This is not about short term, day to day, month to month supplies. This is about the LONG term, over the next decades. The world can not adjust from oil to non-oil at the snap of a finger. It will take decades to transition the world's energy infrastructure smoothly to other energy sources. That takes vision, planning, and strategic implementation. But, first, we have to acknowledge the problem. Ignoring this reality will assure an economic disaster when oil really goes through the roof and no one has an alternate plan to work around it.
BridgeTroll, we can't drill our way out of the fact that reserves and new discoveries are not keeping up with depletion and rising demand. So, we can follow your advice but it won't begin to solve the overriding problem that there simply is not enough oil to sustain the world's oil dependency after the next couple of decades (or, perhaps far sooner!).
Quote from: stjr on October 21, 2009, 10:59:40 AM
Quote from: Captain Zissou on October 21, 2009, 09:53:40 AM
There is no supply crunch... currently.
Guys, read the article Stephen posted. This is not about short term, day to day, month to month supplies.
sjtr, read my whole post. It was not about the article, it was about Stephendare's incorrect thread title.
QuoteBridgeTroll, we can't drill our way out of the fact that reserves and new discoveries are not keeping up with depletion and rising demand
I never said they would. But it changes nothing. You say yourself...
QuoteThe world can not adjust from oil to non-oil at the snap of a finger. It will take decades to transition the world's energy infrastructure smoothly to other energy sources.
To make that transition will require us to explore and exploit our own resources and
reduce our dependancy on foriegn sources.
I used to enjoy how angry river got, but I will repeat again, my comment was not about the article itself. I took issue with how you titled the thread.
"Oil Prices to Rise Again due to supply crunch", says nothing about long term oil resource depletion, "peak oil" (which everyone on here loves to rant about, or anything at all relevant to the article other than that they are both about oil.
Your title looked to be just another of your efforts to drum up an argument by exaggerating the issue. THAT, is what I was disputing.