Jump to content

Peak Oil/Peak Exports


davo22

Recommended Posts

In reply to: Avenger on Sunday 22/06/08 06:50am

QUOTE
The actual result is massive profit for some, the rest of the world going into recession

 

I'd be interested to know how massive are the profits being made atm by big oil

 

Obviously the likes of Chevron would be posting big profits in nominal terms but what about earnings yield ?

Have to remember their input costs have gone through the roof as well with deep sea rig rates ~$500k per day .

Link to comment
Share on other sites

  • Replies 578
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

Posted Images

In reply to: Avenger on Sunday 22/06/08 09:50am

Hi Avenger

 

I just see this way.

 

Production is struggling to keep up with demand. Production peaked in 2005/6 and that is dispite huge oil price rises'

 

That is the evidence.

 

The very worst thing to do at the moment is to dissencentivise the oil compampy drilling programs.

Link to comment
Share on other sites

QUOTE (bermuda @ Sunday 22/06/08 06:47pm)

Echoing the words and actions of the worlds oil majors, peak oil came and went during mid 2005. And as for drilling disincentives, without exception, for some years, the worlds majors have been spending far more money on share buy backs than they have on exploration. Their unsaid common agreement is, there's no elephant sized fields left on the planet, so shrink the shareholder base in readiness for the day of reckoning.

 

The timing of peak oil is not a debate, clearly it is a past event, and even for the non believers, one that may be amply reflected in the rising price of a barrel of oil over the last few years. However, recognition of this recently found mid point for extraction is not the worry, rather the shape of the extraction curve, which may be likened to the trajectory of a golf ball struck by a four iron - ie: a shallow steep rise to peak height, followed by a much sharper descent.

 

Thinking of the consumption curve in this way, will quickly reveal the mid point(peak) is not the half distance in time. Indeed, it is far nearer the end.

 

Regardless what our government might say about endless natural gas supplies, expert opinion from industry insiders says that peak gas will occur within a decade of peak oil - 2015 at the latest, and sooner if extraction rates increase, as they are. Meanwhile, we are digging it out of the ground as if there were no tomorrow

 

 

 

I thought what Jimbob said here on the 19/6/08 was most relevant

 

http://www.sharescene.com/index.php?showtopic=7021

 

"" Most peak oilers do not believe that the world in ending, just that our society needs to transition from an unstable system of exponential growth which will only ever lead to collapse to one that is stable, with zero or linear growth and from a consumer based society where 99% of goods are wasted to one where everything is conserved. Humans have very short life spans and have a tendancy to think just because its been a particular way in the past so too the same in the future. ""

Link to comment
Share on other sites

In reply to: watchmaker on Sunday 22/06/08 08:51pm

Hi Watchmaker,

 

I agree.

 

The most telling graph is the absolute correlation between population growth and energy use.

 

Until we have found the alternatives in sufficient abundance it is is time to conserve oil use and adopt the Chines principle. One child per family. Otherwise we are heading for huge problems.

 

2moro's meeting and all the US rhetoric will be fascinating. Bush is a bit late.

 

 

Link to comment
Share on other sites

Energy Future: A Significant Period of Discomfort

Energy expert Robert Hirsch says the world would need 20 years to prepare for peak oil. But declining global oil production could just be a few years away. Read how we can prepare and ultimately ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“beatÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ this problem.

 

 

 

Robert Hirsch, energy advisor and author of U.S. study on peak oil

"We are racing towards a future that will be very difficult, and we have to do what is necessary to not economically kill ourselves." (Photo: Hirsch)

 

--------------------------------------------------------------------------------

 

 

You were the lead author of a groundbreaking 2005 study on future oil production and declining reserves. How is the situation three years later?

 

Today, the situation is worse, and the reason for this is that it is now obvious that world oil production is already on a plateau. It has reached a high level, and has leveled off. The point at which oil production will decline is probably not far away.

 

 

 

If the world started (to implement solutions) 20 years before the peak oil problem, we would have stood a very good chance of beating the problem and could have avoided significant negative consequences for our economy. As it turns out, we now donÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t have 20 years; we donÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t even have 10. It wouldnÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t surprise me at all if oil production begins to decline within the next few years.

 

 

 

What happens when we reach a peak in oil production?

 

Anybody can see how important oil is in our everyday lives. Oil is basically the lifeblood of all modern economies. When world oil production goes into decline, the decline rate will be three to five percent, maybe more if there is withholding from oil producers. Those numbers donÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t sound very big, but when it comes to conserving or replacing that missing fuel, they are huge.

 

 

 

Oil prices are going to escalate dramatically. They were about 130 dollars this morning. ThatÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s going to be a low price compared to what they are likely to escalate to. There will have to be rationing, and there will be huge problems as different countries try to get the oil they need to sustain some kind of economic well-being. We are racing towards a future that will be very difficult, and we have to do what is necessary to not economically kill ourselves.

 

 

 

What about new oil discoveries, like the recent ones in Brazil? Can they turn the tide?

 

They definitely cannot. To bring those new oil fields into production will require something like five to ten years. The infrastructure needed to drill and produce that oil is very significant. Contributions like Brazil will be of value, but there is no conceivable discovery or discoveries that can possibly turn the tide.

 

 

 

What about the people that say, once the oil price is high enough, new and unconventional sources like tar sands in Canada can be used to produce oil?

 

The point is directionally correct. The problem is that it takes a very long time to build the machinery that is necessary to exploit oil shale, oil sands, coal-to-liquids or heavy oil. In our 2005 analysis we looked at a worldwide crash program to bring these things into being as fast as possible. We made a number of aggressive assumptions, because a crash program is different from business as usual.

 

 

 

But the problem is that the magnitude of oil production loss each year will be so large and the time required to implement these alternatives is so long that the problem runs away from you if we wait too long. And we have waited too long to seriously start. Eventually, these otions and energy efficiency will catch up. It is not as if the world is going to die. But right now, we are looking at a global recession that deepens each year for more than a decade because we are not prepared.

 

 

How is the situation outside the United States?

 

No one has really started to work on the problem anywhere in the world, except maybe in China, where they calculated a few years ago that oil decline might occur around 2012. China has begun with coal liquefaction and other technologies. In addition, they have gone abroad and bought into oilfields around the world. They have probably done more than anyone else to prepare. In most places, the problem is still unthinkable and not politically correct. Most of the rest of the world is not in very good shape to deal with the problem.

 

 

Why do you think peak oil is such a taboo?

 

The thing that is foremost in peopleÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s mind when it comes to energy is climate change. People have pushed hard and governments have taken actions to cut down on the emissions of CO2. But in many cases, decisions are opposite to what we need to mitigate the problem of declining world oil supplies.

 

 

 

For example, coal liquefaction will make very good sense in many areas of the world. Using and liquefying coal is an available technology, but under current conditions, there would be a great deal of CO2 released from making liquids out of coal. So people say, ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“no, we are not going do these things because of CO2.ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ They do not recognize that if we donÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t take action on the impending oil decline, populations are going to suffer beyond what most can imagine.

 

 

 

Many Americans dream of energy independence. Is it still possible?

 

Energy independence in the next three or four decades is impossible for most countries outside of OPEC. The reason is that the magnitude of the problem is enormous. There are a few countries that could conceive of energy independence, the United States being one. But we really havenÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t started, and we canÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t even agree on what we really want and whatÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s important. Sadly, that is one of the reasons why it is going to take a deepening recession and a great deal of personal hurt to get people to rethink their values and get motivated to do whatÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s needed to pull us out of the problem.

 

 

 

The International Energy Agency says we do not have a problem with resources, we have a problem with investments. So the situation is not that bad?

 

Yes, there is an investment problem, but what is hard to understand for many economists and most people is that there is a conventional oil resource limitation, and that oil is what provides more than 90 percent of the liquid fuels we are using today. We are reaching the maximum in production. It will tail off over time, but at a rate that will be extremely difficult for us to catch up to.

 

 

 

Will producing countries profit heavily from such a situation?

 

The folks that have the resources will make much more money once prices escalate. They will be in a very strong financial position.

 

 

 

Most people donÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t recognize that those countries donÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t have an obligation to produce their oil for us. We might think that those people are financially motivated, but OPEC countries now are swimming in money. They are having trouble finding places to use their money.

 

 

 

So when the peak oil scenario hits, a number of oil exporting countries are likely to cut back on oil production. It makes sense for them to conserve their resources for future generations. So the situation will be worse than it might be from a purely geological or investment standpoint. The King of Saudi Arabia recently said that any new oil fields discovered in Saudi Arabia will not be developed; they will be saved for future generations. It is the sensible thing that many of us would do if it was our responsibility to run an oil-producing country.

 

 

 

What about renewable energies? Are they a real alternative for the future?

 

People think that renewable energy can solve all of our problems. They donÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t understand that renewable energy is very limited. Everybody knows that the sun doesnÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t shine at night and that the wind doesnÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t blow all the time. These are fundamentals when you seriously consider at solar cells and wind energy. People have to get off the idea that if we just went to renewable energies, everything will be fine.

 

 

A lot of this is bad news, and I think it is important that people face up to bad news, get prepared, and dig in to work the oil problem. I have faith in humans. We will beat this problem, but we are in for a significant period of discomfort.

 

 

 

 

Link to comment
Share on other sites

In reply to: davo22 on Sunday 22/06/08 09:06pm

Hi there Davo,

 

It's really happening isn't it?

 

And the media just can't get their heads around it:

 

The economic effects are going to be dire:

http://www.youtube.com/watch?v=D7fFffo3XE8

 

In his 2005 report, Hirsch focuses on mitigation options............this is all looking at the short-term, in the longer term, the world has to change the way it operates...........transportation is where they need to start - the only imaginable solution to that is transportation without liquid fuels?

 

Regards,

 

Ice

 

 

 

Link to comment
Share on other sites

In reply to: davo22 on Sunday 22/06/08 09:06pm

Good read davo, save for the common use of the word "production" when what should be used is "extraction". This is not a play on semantics, it merely highlights our human conceit in using suitable words to mask realities.

 

On these Brazilian offshore hopes. The find is apparently in 7000 feet of water, with another 7000 feet of drilling through a salt cap to get at the target, so I don't think there is anything 'near term' about it.

 

We too should be thinking about our natural gas assets as a legacy for a future time and generation. Instead we have a highly visible remit to extract these assets as fast as we can. And by "we", I don't mean Australian companies. Rather, multinationals who will move on when the job is done

Link to comment
Share on other sites

In reply to: Ice9 on Sunday 22/06/08 10:53pm

Gday Ice.....watchmaker

It is amazing the denial people are in.....as soon as someone comes out and claims the peak is a long way off everyone beleives them becouse that is what they want to hear.....we have a world full of so called educated people, yet very few can grasp the fact that there is a limit to the amount of a finite resource that can be extracted......it will end in pain......to go one step further, the concept of peak exports is way beyond them......I beleive the run up in prices are a reflection that peak exports and a rise in consumption have collided.......its amazing that people keep spruiking tar sands, ethanol, coal to liquids and oil shale when none of them. (or all of them put together) are going to be able to keep pace with the decline in conventional crude and all have significant limitations/problems of their own....

 

Still with the high rise in prices people have started to pay more attention.....Global warming is going to pale into insignificance as fuel prices continue to rise......problem being is that most technology used to create the above liquids also results in significant co2 emmissions....it may well be a case of needing to focus our efforts on how to cope with global warming rather than beleiving we can stop it......humans are always going to be focussed more on the here and now rather than what might happen decades down the track..

 

Population in the world is out of control.....We get paid to have babies in Australia.....we should be getting paid to not have children!!!

Cheers

Link to comment
Share on other sites

WASHINGTON (MarketWatch) -- Saudi Arabia confirmed it will pump more oil in July and repeated it will produce even more if demand warrants, news reports from the region said Sunday.

At a high-level meeting of oil producers and consumers, Saudi Arabia said it will pump 9.7 million barrels of oil a day beginning in July, an increase of 200,000 barrels a day from previous levels. It is the highest Saudi production level in nearly 30 years.

"Saudi Arabia is willing to produce additional barrels of crude oil above and beyond the 9.7 million barrels per day which we plan to produce during the month of July, if demand for such quantities materializes and our customers tell us they are needed," Saudi Arabia's Oil Minister Ali al-Naimi said in a speech in Jiddah, according to press reports.

Naimi reiterated Saudi Arabia's belief that the recent spike in oil prices hasn't been caused by a shortage of supply, instead blaming speculators and others for soaring prices.

Earlier Sunday, King Abdullah of Saudi Arabia blamed speculators, high fuel taxes in oil-consuming countries and increased oil consumption in developing countries for high and rising prices, reports said.

Meanwhile, officials from Nigeria said at the conference that the African country is now producing less than 1.5 million barrels of oil a day due to attacks on production facilities, compared to the 2.5 million barrels a day it's able to produce.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×
×
  • Create New...