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Topic: Peak Oil and OPEC
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| UGoGirl | Posted – 5/1/2008 9:30:51 AM | show profile An excellent essay on OPEC and peak oil from ASPO-USA. I've kind of given up on the hope that the US will take responsibility and do what it takes to wean ourselves off of oil. So rather than taxing our selves and investing in ourselves, we'll let the market do it for us and invest in OPEC countries, Russia, etc. Perhaps in this way, mother earth will save us from extinguishing ourselves, but limiting our consumption of fossil fuels (although I know that coal is the big one that could really do us in and may be relatively plentiful). Yes, OPEC and Russia etc will become vastly richer over the coming decades, but fear not, as oil production declines they will eventually crash and burn as their one and only product to sell is gone. *** OPEC and Peak Oil OPEC's position on the Peak Oil question should be the decisive factor in the ongoing and seemingly inconclusive debate on this issue. OPEC supplies about 42 percent of world petroleum consumption. ... If non-OPEC production were to reach a plateau or begin to decline, OPEC producers would need to increase production substantially to meet ever-increasing world demand. ...All the members of OPEC are countries without a significant industrial base that find themselves in possession of an immense treasure. In the normal course of events they would either be taken over by their larger neighbors or come to terms with the great global powers, who work behind the scenes through local cooperative factions or, in extreme cases, by undisguised military intervention. Open admission of an imminent non-OPEC production peak would make their oil reserves much more valuable, and make these countries even more tempting prizes. Dissimulation or silence on the part of OPEC on the Peak Oil issue does not equate to ignorance or lack of understanding, but rather to prudence and subtle calculation. While OPEC member states lack modern military-industrial resources, they have first and foremost control of their local geography, and are well aware of the dangers of covert and overt foreign attack or interference. Past OPEC actions provide some guidance as to what one might now expect. ...This history - by no means thorough or complete - demonstrates that OPEC is fully capable of taking decisive action to regulate the market to protect its interests. ...Since 2002, OPEC has increased its annual average basket price from about $24 per barrel to almost $94 per barrel, nearly a factor of four, and OPEC's daily basket price is now over $100 per barrel. This has been accomplished with modest disruption in the world economy and without provoking significant retaliation from consumers. It is a stunning achievement. OPEC is now clearly in full control of the oil markets, both physically and psychologically. ...It would seem that prior 2002, OPEC was virtually giving away its crude oil. ...Given these factors as well as the rapid increase in oil demand in developing economies, one should expect continued increases in oil prices; US motorists should plan for gasoline prices much more equal to European prices, or between $5 - $10 per gallon over the next two to three years. These price increases will be camouflaged by large price fluctuations, but with a very strong upward bias. OPEC has every intention of obtaining more of the real value of its exports for producer nations in the near term. In addition, it is interested in maintaining stable markets and avoiding shortages which have a negative impact on economic activity and essential services in consumer nations. This could provoke or be used to justify military action against OPEC member states. Much higher prices serve a further useful objective of reducing demand and thus the call on finite OPEC resources. ...Given all of the above factors, it would appear to be safe to conclude that the era of easy oil is over, and that extraction rates of petroleum should not increase substantially above current values. ...Thus, the age of Peak Oil has finally arrived, although not as expected, with large disruptions in the world economy, but gradually, without fanfare, and without major financial upheaval. The fundamental cause is not primarily a limit on petroleum resources but the long term strategic considerations of OPEC, considerations that are completely missing in consumer nations. This development is as unexpected as it is welcome. |
| UGoGirl | Posted – 5/1/2008 9:48:01 AM | show profile Welcome to our carbon constrained world It looks like mother earth, in her infinite wisdom, may save us from extinguishing ourselves through oil and natural gas. Here's to hoping she will also save us by limiting our access to coal (this is the big one...). We can always hope... But I think we'd be acting suicidally if we don't take steps to reduce our coal consumption. I really don't think we can count on mother nature to limit us on this one... *** New Scientist - China down to 12 days of coal stocks China's booming economy could be running out of steam - literally. At the end of a cold and stormy winter, the country has just 12 days of coal reserves at most power stations. Some provinces, including Hebei, bordering Beijing, have less than a week's coal left. This is a record low, the state electricity regulatory commission revealed on Tuesday. China relies on burning coal for 70% of its electricity. Even though Chinese coal production in the first quarter of this year was up almost 15% on the same period last year, it has apparently not been enough to meet rapidly growing demand. Coal imports, which started last year, have also failed to meet the difference between supply and demand. Such is the demand for power from an economy that has been growing by 10% a year for more than two decades. |
| UGoGirl | Posted – 5/2/2008 6:13:07 PM | show profile Another incredible article, this an interview with the Chief Economist of the International Energy Agency. **** Fatih Birol interview: 'Leave oil before it leaves us' The International Energy Agency (IEA) gives the alarm: The world could run out of oil faster than expected - the danger of a supply shortage is rising ...Birol: ... is, that we see a sharp decline in production from the existing oil fields, especially in the North Sea, the USA and many non-OPEC countries. ...Even if all those projects which are already funded will be implemented, the overall capacity they can bring for new oil production is too little. Schneider: How much is missing? Birol: Exactly 12.5 million barrel a day are still missing, about 15 % of the global oil demand (the current global oil consumption is 84 million barrel a day, note from the editor). This gap means that we could face a supply shortage and very high prices during the next years. Schneider: Is there still a way to avoid this? Birol: ...In the Middle Eastern countries with a large oil supply - but I am not sure that those countries and their oil corporations will invest as much as would be necessary. They might think that it is not in their own interest to raise the production that much, to keep the oil prices up. A further part of the investments has to go to the OPEC countries, to the USA and to the North-Sea, to prevent the decline of the oil production there. Schneider: In the WEO 2007 it is mentioned that the rapid decline of oil production will be between 3.7 and 4.2 percent per year. Is that right? Birol: Exactly- Schneider: This decline is even steeper than the one predicted by the Energy Watch Group! ...Schneider: One of the statements of the WEO 2007 is that the complete additional oil production has to come from the OPEC countries and especially the Middle East. Salem el-Badri, the general secretary of the OPEC has announced on a conference regarding energy security in London last February, that the OPEC wants to invest 200 billion dollar until 2012 to create new production capacities of 5 million barrel (mb) a day. This is a sharp contrast to the WEO 2007 where you state that to the year 2020 we need 24 mb per day in new production capacity to satisfy the rising demand for oil. So de facto Salem el-Badri says that the OPEC will not be able to meet the expectations. Doesn't that mean that we will run into serious problems? Birol: Indeed. this is the reason that this year for the first time we announce a "supply crunch" situation. There is a gap between the global demand for oil and the amount which is or can be brought to the market from that region. We think that the oil producers have to increase their production output significantly, but we are not sure that they will do it or even can do it. Schneider: Because they don't want to? ...Birol: You could put it that way. I think we are entering a new world oil order. The new players, which decide how much oil is going to the markets, are mostly public oil companies. For many reasons things will not be as easy as they have been before. http://www.energybulletin.net/43604.html |
| UGoGirl | Posted – 5/2/2008 9:30:00 PM | show profile Thanks Novel for warning me but I've been looking at this stuff for several years and I'm sticking with people like the Chief Economist of the International Energy Agency. I think they know a little better than you or I. No, I actually don't have money invested in fuel cells (I think they are way way way in our future) OR electric vehicles. But anyone who invested in Toyota a few years back and dumped american auto makers is probably happy with that decision. I didn't do that either. Unfortunately. |
| UGoGirl | Posted – 5/3/2008 12:30:41 PM | show profile Novel, it's possible we'll "figure it all out" to avoid any type of crisis, but so far that's not happening is it? When I first came across this whole issue four or so years ago, I was a bit incredulous and kind of set out to disprove it. Well, turns out I became convinced. But it took a lot of looking at data, and underneath the surface. I know you don't need or want to be spoon-fed, but if you are interested you could really look into this issue yourself and reach your own conclusions. After really looking into it you might or might not change your opinion. A few questions to get you started: 1. Since 2000 global oil prices have quadrupled. Since then, how has oil production changed in the U.S., Norway, UK and North Sea? 2. What is Cantarell and why should we care about it? 3. What is the Hirsch Report? 4. What does the NPC report "The Hard Truths About Energy" say? 5. Who is Daniel Yergin and how successfully has he predicted oil prices since 2000? Those are just a few questions to get you started... |
| UGoGirl | Posted – 5/3/2008 10:46:34 PM | show profile I guess being patronizing begets being patronizing. No disrespect, my friend. |
