Guest guest Posted September 23, 2007 Report Share Posted September 23, 2007 At 08:29 AM 9/23/07, you wrote: >Two barrels of oil are used for each one found. $100 oil anyone? >Posted by: " Mark Graffis " mgraffis mgraffis >Sat Sep 22, 2007 7:48 pm (PST) >http://www.theglobeandmail.com/servlet/story/LAC.20070921.IBREGULY21/TPStory/Bu\ siness > >Two barrels of oil are used for each one found. $100 oil anyone? > >ERIC REGULY > >September 21, 2007 > >ROME -- For the peak-oil crowd, that merry band of doomsters who believe >global oil production is about to go into irreversible decline and plunge >us into a new Stone Age, the timing couldn't have been better. As the >Association for the Study of Peak Oil and Gas was holding its conference >in Cork, Ireland, earlier this week, oil prices conveniently set record >prices. By midweek, they had gone as high as $82 (U.S.) a barrel. > >The conference speakers were no doubt thrilled. If oil prices had been >falling, their message would have been laughed out of court. As it were, >Ronald Oxburgh, the British lord and geologist who is the former head of >Shell U.K., one of the world's biggest oil companies, looked like >something of a prophet. He said oil prices could hit $150 as supplies fail >to keep pace with soaring demand. Another speaker, CIBC World Markets >chief economist Jeff Rubin, predicted prices of " around $100 a barrel by >the end of next year. " Talisman Energy chief executive officer Jim Buckee >talked about rapidly declining production from once-prolific and seemingly >stalwart oil fields. > >For years, decades even, the peakists have been considered the lunatic >fringe by the mainstream oil and gas industry, with its visions of endless >gushers. The industry had a simple but compelling argument: If you don't >believe us, listen to the economists. > >The economists said - and still say - there is no shortage of oil; there >is just a shortage of oil at low prices. If the price, say, doubles, the >reserves will rise accordingly (though not necessarily on a 1-to-1 ratio). >Higher prices means expensive reserves, like Alberta's oil sands, can be >commercially produced. Higher prices finance fatter exploration budgets >and better oil extraction technology, and lure more talented geologists >into the business. > >They were right. But maybe the time has come to stop putting so much faith >in the economists. As Toronto's Pollitt & Co. said in an investment note >this week: " Just because OPEC [the Organization of Petroleum Exporting >Countries] raised output quotas doesn't mean oil wells will respond. " >In one sense, the peak oil argument isn't even worth arguing about. Of >course oil production will - eventually - decline, plummet perhaps, for >the simple reason the planet has run short of the rotting dinosaur >carcasses needed to make oil. The better argument is that it scarcely >matters whether oil production peaks this year or next if a huge gap >develops between demand (rising alarmingly) and production (barely rising >or rising not at all). In either case, the price goes up, as it has been, >leading to potential economic upheaval or worse. > >To Mr. Buckee's point, some of the world's biggest oil fields are limping >into the geriatric ward. Take the North Sea, the reserve that turned the >United Kingdom into an oil superpower in the 1980s, much to Margaret >Thatcher's delight. It was fun while it lasted. Production is falling off >a cliff. The U.K.'s oil and gas output peaked in 1999 at 4.5 million >barrels a day (a figure that combines oil and the equivalent output of >natural gas). Today it's about three million barrels, a figure expected to >decline by 10 to 15 per cent a year. The U.K. is now a net importer of oil >and gas. > >Mexico's Cantarell field, one of the world's most prolific oil producers, >is sweating too. Last year's production, which averaged 1.78 million >barrels a day, was 13 per cent lower than the previous year's. A similar >decline is expected this year. Meanwhile, demand is climbing relentlessly. >China was self sufficient in oil until the mid-1990s or so. Now it's the >world's second-biggest oil importer. Its consumption has climbed about 50 >per cent since 2000 alone. China can't take all the blame. Note that some >of the world's biggest oil producers are holding back oil to feed their >own growing economies. Saudi Arabia's consumption was up about 30 per cent >between 2000 and 2005; Iran's was up 21 per cent. > >Since the 1960s, two barrels of oil have been consumed for every barrel >found. Meanwhile, alternative energy is going pretty much nowhere. At a >conference in Scotland earlier this month, Exxon Mobil and Royal Dutch >Shell predicted that wind and solar power would supply only about 1 per >cent of global energy demand by 2030. If they're right, fossil fuels will >remain by far the dominant energy source. But at what price? Forget peak >oil. With such a yawning gap developing between consumption and >production, higher and higher prices (barring a global economic collapse) >seem certain. The predictions for oil at $100-plus a barrel are now no >more far-fetched than oil at $50. > >ereguly ****** Kraig and Shirley Carroll ... in the woods of SE Kentucky http://www.thehavens.com/ thehavens 606-376-3363 --- Outgoing mail is certified Virus Free. Checked by AVG anti-virus system (http://www.grisoft.com). Version: 6.0.859 / Virus Database: 585 - Release 2/14/05 Quote Link to comment Share on other sites More sharing options...
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