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Peak Oil/Peak Exports


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QUOTE (Ice9 @ Wednesday 24/09/08 10:35am)

ComUnNoTerms,

 

OK, lets play.

 

I say CERA are, bluntly, full of sh.t. To be in production in the mmbd range in 2017, the field needs to have been discovered and have the initial wells producing via FPSO now. This is a polite way of me saying 'Tupi at 2 mmbd in 10 years ? Fuggedaboudit'.

 

Unless of course CERA are lying with weasel words and using the term 'production capacity' while silently agreeing that it wont do this each and every day through the year - as we know that while a field might be able to achieve super-production for weeks or months, maintaining that rate will risk permanent damage (cf the Saudi habit of using 'burst' production to stabilise the market, and then taking them offline to preserve reservoir integrity. Also see how Cantarell and Yibal fell off a cliff production-wise).

 

At 4.5% decline over 10 years, thats us losing call it 30 of our current 84 mmbd.

 

Knowing what we know now, wheres that 30 mmbd coming from, ComUnNoTerms. I want it field by field. I want it in a way that acknowledges current shortages of rigs, FPSOs and skilled staff, and in a way that, if you are relying on Iraq going to 5 or 6 mmbd, explicitly states things like 'And Iraq returns to peace and harmony'.

 

So lets play ComUnNoTerms. Give me your facts, and then we will argue about them.

 

Ian Whitchurch

 

PS http://www.theoildrum.com/node/3720#more is useful, if just as putting IEA etc estimates in one place

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In reply to: ian_whitchurch on Wednesday 24/09/08 11:59am

Read My Lips

 

 

"Demand destruction and viable alternatives will cushion the impact of Peak Oil and possibly delay it for another 50 - 500 years ."

 

Not to mention all that gooey stuff bubbling up from the centre of the Earth http://www.sharescene.com/html/emoticons/wink.gif

 

Ching Ching - How do you like those for facts buddy !!!!

 

One nil http://www.sharescene.com/html/emoticons/lmaosmiley.gif

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As transportation is by far the biggest user of oil/gas, any real demand destruction would have to come from this sector you would think. I am sure this will happen, most probably when battery technology catches up and we all drive electric. How far away is this though? Tooling up for auto production takes time as does mass production to make it affordable. I think it is definitely 5yrs and probably 10 years away. Meanwhile the big fields are declining and recent discoveries not enough to fill the gap. In the meantime non-conventional (CSG,Shale gas) will do their bit. That is where I am invested mostly. cheers 2bs
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In reply to: ComUnNoTerms on Wednesday 24/09/08 03:06pm

Must say I am a bit confused with this thread--all commodities suffer demand destruction for the same reason---HIGH PRICES-----high prices are ultimately the result of supply shortages and /or higher input costs. Agree the price will go down over the next few yrs due to slowing economic conditions in the world---- BUT lower prices dont provide a favourable environment for developing "viable alternatives"(there ar NON anyway) Tom

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In reply to: Twobees on Wednesday 24/09/08 03:26pm

I was suprised when we had the recent petrol increases how many of my friends changed thier habits when using thier cars. Many told me that they were only going shopping once a week as compared to 3-5 times previously.

 

Now these are comparatively weathy people so just imanage the effects it was having on the lower wage earners.

 

Just look around and see how much wastage there is. The design of our communities and how and where we utilise our resourses has massive scope for flexibilty.

 

So we buy locally produced shoes instead of from far away countries. We live near our work. We adjust our lifestyes accordily. No big deal and within one generation people will see this as normal.

 

Homo Sapiens have an amazing capacity to adjust and will do so calmly without the mad max scenario touted by some of these doomstayers.

 

I have a few rules I stick to when investing.

 

I Never Buy on future predictions (mine or others)

 

I Only buy uptreading stocks. My watchlists are set to activate Above current prices as opposed to below them.

 

I run a stoploss that is set in concrete and non negotiable.

 

And most importantly I NEVER NEVER fall in love with a stock or industry. I dont care wether its oil or Airlines as long as it makes me money.

 

I dont mean to offend people here.

 

I dont discount peak oil.

 

I just believe that the % increase in the rate of demand is tiny compared to the percieved % rate decrease in supply and demand destruction and many many other factors will deal with this.

 

C

 

 

 

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In reply to: ComUnNoTerms on Wednesday 24/09/08 04:08pm

Some good investment tips in there C and I agree with all of them. As soon as mass electric or other alternatives looks imminent I am outa there.

However I have a different understanding regarding excess supply. You said "I just believe that the % increase in the rate of demand is tiny compared to the percieved % rate decrease in supply and demand destruction and many many other factors will deal with this."

I just think for such an essential commodity as energy, the excess supply at the moment is insufficient when you take into consideration other things like geopolitical tension- the fact that oil reserves are so concentrated in a politically unstable part of the world, hurricanes, the chindia factor. The market is always forward looking and what it sees is a graph of ever decreasing oil production - so I think the market is smart to be putting a higher price on it atm. As tomhar says, alternatives are not going to happen without it. cheers2bs

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In reply to: Twobees on Wednesday 24/09/08 05:07pm

Yes 2 bees. I agree that "geopolitical tension- the fact that oil reserves are so concentrated in a politically unstable part of the world, hurricanes, the chindia factor" will be forever be putting presure on the upward price of Oil.

 

This wont however equate to substantially high prices in Oil Stocks.

Why would you want to invest in an industry that is subject to this sort of volatility. For which you are at the mercy at such uncontrolable factors as Weather and fanatics.

 

A stable if not steady incline in POO and a healthy world economy will see a steady incline in Oil stocks. A rapid increase in POO and a world ecomy in recession will see All stocks crash. Including Oil stock. Its a paradox.

 

When statements are made that

 

"we are on the abyss"

"POO will be $500 by the end of the year"

"Thank goodness its Hurracaine session, should see a price increase soon"

"Oil stocks will be the only stocks to hold when the S#@$T Hits the fan"

 

I say Be careful what you wish for - it could be the worst thing to happen to your portfolio. (oil stocks included)

 

C

 

 

 

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In reply to: Twobees on Wednesday 24/09/08 03:26pm

By the way 2 bees. As your probaly aware. There is going to be a massive Government sponsored and private industry investment in CSG,Shale gas in the United States in the coming years. May well be a journey worth taking.

 

http://www.sharescene.com/html/emoticons/smile.gif C

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In reply to: ComUnNoTerms on Wednesday 24/09/08 06:00pm

I am with you in regards to oil stocks. This is a beggar of a sector to do any good in and is usually better traded than invested in. For those that know the industry and sector well (and there are quite a few here on SS), opportunities do present themselves however and the gains can be substantial if you remain agile. And like I said, my investing focus is on unconventional, where reserves (and share prices) are growing. 2bs

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In reply to: ComUnNoTerms on Wednesday 24/09/08 03:06pm

 

ComUnNoTerms wrote,

 

"Read My Lips "Demand destruction and viable alternatives will cushion the impact of Peak Oil and possibly delay it for another 50 - 500 years ." Not to mention all that gooey stuff bubbling up from the centre of the Earth Ching Ching - How do you like those for facts buddy !!!! One nil http://www.sharescene.com/html/emoticons/lmaosmiley.gif"

 

What demand destruction ?

 

We've had $90-$120 oil for about 12 months. Consumption is still running at circa 85 mmbd. You're quoting some anecdotes, but can you kindly refer me to some actual, like, numbers ?

 

Next, what viable alternatives ? Please name some, capable of adding 10-20 of the 30 mmbls that your 4.5% annual decline rate say we need over the next 15 years.

 

Remember, *over the next 15 years*. Pie in the sky crap like CTL or shale oil ^k^k^k^k^k^k boiling perfectly good source rock by hand doesnt count, unless someone can show me a project that is capable of scaling to 100-200 thousand barrels a day (and remember, coal and gas aint exactly cheap right now either).

 

"all that gooey stuff bubbling up from the centre of the Earth" OK, if you buy the abiotic oil story, can you kindly tell me about an abiotic oilfield. Just one. Anywhere. Please. You know, one of the ones that doesnt have biomarkers that show you the source it comes from.

 

Ian Whitchurch

 

PS In case anyone out there still things CERA's opinions are worth anything more than fish and chip wrapping, here is a nice summary of their comments about oil prices over the last 5 years or so. Note the consistent theme of being completely, totally, utterly, value-destroyingly wrong.

 

http://www.theoildrum.com/node/3487

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