Oil & Gas Engineering & Information

Peak Oil and Energy Security

2010-03-31T00:26:00.000-07:00

The Release of the Industry Taskforce Report on Peak Oil and Energy Security

This is a guest post from Erica Thompson, formerly with the UK Energy Research Centre (UKERC Report) and now working on a PhD at Imperial College, London. She attended the ITPOES report launch on our behalf.

Today's (10th Feb 2010) launch of the second report of the Industry Taskforce on Peak Oil and Energy Security (ITPOES) was rather more high-profile than the previous one. After summaries of the report from other contributors, Richard Branson arrived late to read out a short speech and media interest (informally measured by the rate of camera flashes) picked up; we can expect a scattering of news stories about the report to follow, in the usual places.

As we reach maximum oil extraction rates, the era of cheap oil is behind us. We must plan for a world in which oil prices are likely to be both higher and more volatile and where oil price shocks have the potential to destabilise economic, political and social activity.

Our message to government and businesses is clear. Act now.

Protagonists

Involved in the current report are:
two construction companies: Arup and Foster + Partners
two energy companies: Scottish and Southern Energy (one of the UK's "Big Six" energy suppliers) and Solarcentury (group convener Jeremy Leggett's solar energy installation firm)
two companies with a stake in public transport: Stagecoach Group (the second largest transport firm in the UK) and Virgin (which has fingers in many pies but are here under a transport "hat").

The above six firms all have a great interest in advocating action to reduce oil dependence, as they set out in the report and in their presentations at the launch. Government incentives or public infrastructure projects to improve energy efficiency, invest in renewable energy and increase use of public transport would benefit these companies directly. Of course, they also lay stress on the cost and risks to consumers, the need to reduce energy poverty, and in some cases a wish to contribute to reducing carbon emissions. Since the last report was published, FirstGroup (the largest transport firm in the UK) and Yahoo! have quietly absented themselves from the table. Whether or not other companies have been approached is unclear.

What's new?

As before, they offer two "expert opinions" - one from Chris Skrebowski, with updates on the impact of recession and new shale gas developments, and one from economist Robert Falkner on economic consequences and the role of climate and energy policy. This reflects the shift in tone from the more technical first report to a greater emphasis on advocacy, remembering that a UK general election is imminent.

Economic modelling

Perhaps the most useful issues raised by the ITPOES report are the comments on risk to the UK's balance of payments in the next decade:

The UK, because it is now a net and rising importer of oil, gas and coal, is becoming increasingly exposed to competition for supplies from other energy importers. The insulation from international supply pressures provided when the UK was self- sufficient in oil and gas supply is now eroding quite quickly. This is likely to put pressure on the UK balance of payments and in a world of floating exchange rates is also likely to put downward pressure on the valuation of the pound sterling. In other words the positive benefits to the valuation of the pound as a petrocurrency are now disappearing.

Appendix D to the report considers this in more detail, with an (illustrative rather than predictive) model of the UK economy to 2025, developed by Arup. They consider two scenarios: one reactive (BAU) and one proactive. The proactive scenario assumes that some industrial output to consumer goods is diverted to investment in energy efficiency and renewables, and passenger car and freight oil consumption is reduced, so that total demand for fossil fuels is reduced to about 2/3 of the present level by 2025. The modelling is also interesting in being the first economic model I have seen which values both energy flows and capital stocks in energy units (petajoules and "virtual petajoules"). The result of a BAU reactive approach is "a continuous devaluation of sterling at an average of about 1 percent per year".

The UK's balance of payments is propped up by a decline in the value of sterling compensating for increased fuel imports in the reactive scenario. Click to enlarge.

In the proactive scenario, demand for energy falls and fuel imports remain low. Click to enlarge.

Despite the somewhat simplistic modelling, there is a useful point here which is often unremarked; that the UK's declining North Sea production threatens the balance of payments quite drastically in the next decade or so unless domestic energy demand can be reduced or, equivalently, domestic energy production increased. Even if, as in this analysis, the effects of volatility in oil prices and the possibility of supply shocks are neglected, there are clearly medium term structural problems with current UK energy policy which have further consequences for national energy security.

Recommendations

The recommendations of the report are divided into the categories of "general", transport, retail and agricultural, power generation/distribution and heating policies. In most areas the recommendations are rather vague and and may be criticised by the cynical as self-serving (however, in what instance would we expect a company to make any other recommendations?). Actual reductions in service demand are skirted around carefully. Conspicuous by its absence is any mention of a carbon price, which was only mentioned in passing by Brian Souter (of Stagecoach, and clearly the most environmentally motivated of the group) at the launch.

Government response

A recurring theme of the morning's speakers was the need to move "from recognition to action". This was echoed by a representative of the UK Department for Energy and Climate Change (DECC) in an official response to the report, emphasising their own commitment to move "from strategy to delivery". The response was muted in tone, sticking to the party line that DECC "are already taking action" and citing a list of their projects from last summer's Low Carbon Transition Plan - which did not mention oil depletion, even obliquely. It seems that peak oil, though evidently recognised within DECC, remains somewhat unutterable as a specific motive for action. Whether or not it still influences policy decisions remains to be seen.

Conclusions

Although there is little new analysis, this report marks a further milestone as energy security issues continue an inexorable rise up the national agenda. Coming on the heels of a new consultation by the energy regulator Ofgem on energy security and longer term energy policy, and in the run-up to a general election, the report is what it set out to be: a well-timed wake-up call to British industry and government. Whether it will be heeded remains to be seen. Criticism is likely to focus on the (unavoidable) specific motivations of the partner companies, the (perhaps necessarily) simplistic approach to analysis and the (very much contestable) implicit assumptions. Nevertheless, the high profile of the companies and individuals involved is a marker of the increasingly widespread, if overdue, recognition of the UK energy dilemma, and the fact that DECC were represented at the launch event of a report with Peak Oil in the title is certainly a step in the right direction.

Utah's 'Green' Oil Sands

2010-03-31T00:17:00.000-07:00

Can Tar Sands Really be Green?

With oil hovering around $80, interest in U.S. oil sands projects is picking up again. One small Canadian firm, Earth Energy Resources (EER), has its eye on Utah's tar pits. They've acquired lease rights to 6,000 acres in the Uintah Basin, located in the eastern part of the state.

There's nothing new about a company trying to capitalize on the massive tar sand reserves beneath Utah, Wyoming, and Colorado — which some estimates put at up to a trillion (very hard to reach) barrels.

What's interesting is that EER claims they can extract the bitumen in an environmentally-friendly way.

Eco-Friendly Oil Sands?

EER claims to have invented a green extraction process. I'm intrigued but skeptical. American environmentalists are going to make it tough for any oil sands projects to get a foothold in Utah (or anywhere else in the US). Before/after pics like this one from Alberta have environmentalists on high alert:

EER plans to use a solvent to extract the bitumen, which they claim is far cleaner than traditional methods. They also plan to dispose of the by-products in the same pits they came from.

Current processing methods use steam injection, which requires a lot of energy and generates excess contaminated water. EER thinks they have a better method, which is detailed in the technology section on their website.

CERI Study on "Greening" Tar Sand

A study by the Canadian Energy Research Institute could also put a damper on EER's plans. CERI spent 18 months studying what it would take to make oil sands comparable to traditional oil in terms of pollution. The results: Oil would have to be around $105/barrel to allow profitable extraction.

Hard to say if technologies like this will pan out, but it's worth keeping an eye on. We'll keep you updated.

Peak oil IEA source

2010-03-12T03:29:00.000-08:00

We have already entered peak oil,’ IEA source reportedly claims

Two International Energy Agency whistleblowers have come forward with startling claims about the world's supply of crude oil, according to a report published Tuesday.

"We have [already] entered the 'peak oil' zone," an unnamed former IEA official told British newspaper The Guardian. "I think that the situation is really bad."

A second whistleblower reportedly claimed that the IEA's current figures are inflated due to pressure from the United States and a pervasive fear that the announcement of falling oil output in the future could cause markets to respond with panic.

The claims come on the same day the IEA plans to publish its annual "World Energy Outlook" report for 2009.

"Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further," one of the IEA sources reportedly told the paper. "And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources."

The agency reported in its 2008 World Energy Outlook that a field-by-field analysis of production trends revealed "that decline rates are likely to rise significantly in the long term, from an average of 6.7% today to 8.6% in 2030."

The whistleblowers see things differently.

"The IEA in 2005 was predicting oil supplies could rise as high as 120m barrels a day by 2030 although it was forced to reduce this gradually to 116m and then 105m last year," one of the sources claimed. "The 120m figure always was nonsense but even today's number is much higher than can be justified and the IEA knows this."

In a 2008 interview with Fatih Birol, chief economist at the IEA, Guardian environment writer George Monbiot reported that the IEA had expected peak oil output to be reached in a decade or two.

"In terms of non-Opec [countries outside the big oil producers' cartel]," Birol reportedly said, "we are expecting that in three, four years' time the production of conventional oil will come to a plateau, and start to decline. In terms of the global picture, assuming that Opec will invest in a timely manner, global conventional oil can still continue, but we still expect that it will come around 2020 to a plateau as well, which is, of course, not good news from a global-oil-supply point of view."

The 2008 World Energy Outlook suggested peak oil would be reached in 2030.

The prediction that peak oil production was approaching in 2020 was enough to "scare the pants off" Monbiot, considering the predicted implications of a global energy crunch in just over a decade. However, if the allegations by The Guardian's whistleblowers are indeed true and peak oil has been reached, dark days loom for the global economy.

According to The Wall Street Journal, the agency is not expected to announce the arrival at such a dramatic conclusion. Instead, the 2009 report due out Tuesday will predict slower growth in demand for oil, the Journal reported.

Reuters added: "While the Paris-based IEA has repeatedly warned that a lack of investment could lead to a strain on supply, it maintains that there is enough oil in the ground."

Oil & Gas Engineering Consultant Company

2010-01-14T07:55:00.000-08:00

We are an Oil & Gas Engineering Consultant Company, is currently seeking Indonesia's young professionals with high motivation and strong determination for the following positions:

ELECTRICAL ENGINEER (JE)
* Having Bachelor degree in Electrical Engineering Dicipline (Power/Arus Kuat) from Reputable University
* Minimal 3 years experiences in Oil and Gas Engineering
* Familiar with Electrical Software such as ETAP
* Able to work independently or in a team
* Have a strong motivation and effort to work
* Fluent in both written and spoken English

JUNIOR PIPING ENGINEER (JPI)
* Having Bachelor degree in Mechanical Engineering Dicipline from Reputable University
* Fresh Graduate are welcome
* Minimum GPA 3.00 from 4.00
* Able to operate engineering software
* Able to work independently or in a team
* Have a strong motivation and effort to work
* Fluent in English (Read, Oral and Written)

JUNIOR ELECTRICAL ENGINEER (JE)
* Having Bachelor degree in Electrical Engineering Dicipline (Power/Arus Kuat) from Reputable University
* Min. GPA 3.00
* Familiar with Electrical Software
* Able to work independently or in a team
* Have a strong motivation and effort to work
* Fluent in both written and spoken English

If you meet the above requirements, please submit your application with detailed resume and your recent photograph to:

PT. SYNERGY ENGINEERING
Jl.Nusa Loka Blok C1/03 sektor XIV-4
BCD-City Tangerang 15318 (sebelah kampus BSI)

or

hrd@ptsynergy.co.id

recruitment@ptsynergy.co.id

Trade Oil Information Company

2010-01-05T05:32:00.000-08:00

Trade Oil Information Company

Welcome

McBride Oil Company, located in Aliceville, Alabama, distributes petroleum products, lubricants, and other related products throughout West Alabama and East Mississippi. McBride Oil also operates and leases convenience stores, restaurants, and a Days Inn hotel in York, Alabama.As the authorized BP and Pure distributor for the area, McBride Oil provides an exceptional level of customer service. We understand the value of quality and maintain our customer's trust through dedication and the highest business ethics. We offer quality products and competitive pricing.McBride Oil representatives are always available to consult with your staff, by a toll-free phone call or in person. For more information about our products call us at 1-800-252-9661.

Economic View: Running on empty: peak oil production is in sight, global supplies will dwindle - and the US, for one, is ill-prepared

2010-01-05T05:30:00.000-08:00

China's rapid growth in consumption could suck up all the extra crude pumped next year, leaving other countries to get by with less

Hamish McRae

Sunday, 11 November 2007
The oil price will go through $100 a barrel at some stage in the next few months, maybe in the next few days. One consequence, petrol at £1 a litre, is already with us. The climb is surprising, at least to the oil companies, who a couple of years ago were still expecting an oil price of below $50 a barrel, and doing all their planning on that basis. But, in a way, it is more surprising that the world economy has managed to carry on growing strongly despite this rise. For the oil price affects not only energy prices; oil also is the feedstock for plastics and other products we use every day.
Related Article
'The era of cheap oil is dead': $100 a barrel is on the way

Oil Futures Jump To A New 1 Year High

2009-10-16T05:16:00.000-07:00

Crude oil futures jumped to a new 1 year high Thursday, just above 77 dollars a barrel after a sharp drop in U.S. gasoline stocks buoyed the market.

Light, sweet crude for November delivery settled 2.40 dolars, or 3.2%, higher at 77.58 a barrel on the NYMEx, having peaked at an intraday high of 77.97 dollars a barrel.

Data released Thursday by the U.S. Department of Energy showed a sharp 5.2 million barrel drop in gasoline, far from the 700,000-barrel increase analysts surveyed by Dow Jones had expected. Distillate stocks, which include diesel and heating oil, fell 1.1 million barrels against expectations of a 100,000-barrel decline, helping to trim stocks that still remain at their highest levels in over two decades.

The stock draw was the catalyst for oil futures to extend their run past 75 a barrel, a price that had until Wednesday not been breached this year.

While the market now eyes 80 dollars a barrel as the next barrier for oil to break through.

Apart from oil, the veteran trader, Art Cashin commented today`s economic data on CNBC earlier today:

“If you put things in perspective, initial jobless claims mean people who just got laid off and it’s over 500,000 and it keeps going. At some point, you’re going to have so many people laid off that the claims have to go down because there’s almost nobody left to fire so you have to be careful of looking at that number. It’s still eating away. This is going to be a long, hard slough—this is not going to be a V-shaped recovery.”

Is The Oil Rise A Simple Dollar Story?

2009-10-16T05:15:00.000-07:00

“We’ve broken this year’s high on improved sentiment after the drawdown in gasoline inventories. But inventories did not decrease due to rising demand, which is still weak, so the risk is we revert to a 68-75 dollar range.”

Eliane Tanner, commodity strategist at Credit Suisse Group AG

Well, I think everybody knows that this recent rise in oil futures is basically due to a very weak US dollar. At least, most of the institutional comments on the oil prices seem to reflect that view.

Global Oil Addiction Alternatives

2009-08-25T23:40:00.000-07:00

The economic growth of many nations is exclusively linked to the international oil production economy. This fact results in increased resouce competition between the great powers, and as we have seen in recent U.S. foreign policy, war and conflict are born from these factors. The growing energy needs of Asian nations such as China and Japan are only likely to increase the political tension during the coming decades. America needs to lead by example by investing heavily in renewable energy research and technology. Not only will this leadership help lessen the growing energy needs in the continental United States, but it will also go a long way to secure the nation’s increasingly dangerous security concerns.

» Source: LA Times

The first step toward curing an addiction is to admit its existence. So it was encouraging when President Bush admitted in January that “America is addicted to oil.” But America hasn’t been good about going to recovery meetings - which makes it harder for the U.S. to get the world’s other oil addicts to go too.

For China, India, Japan and every other industrial nation, a steady supply of oil is essential to economic growth. And as competition for oil increases, so does the temptation to make it the focus of foreign policy. Bush has warned against the hazards of this approach, and U.S. history - especially in the Middle East - is a catalog of its dangers. But he’d be more convincing, to Americans and other world leaders, if his policy more closely matched his rhetoric.

Now other nations are beginning to do as the U.S. does, not as it says. China has an $8-billion investment in Sudan’s oil sector, for example, which helps explain why it turns a blind eye while the thugs who run Sudan ravage Darfur. The argument used to be that as China’s economy became more integrated with the world’s, it would become a more responsible player in world affairs. This was half right. For the most part, ideology has given way to pragmatism in Chinese foreign policy. Beijing tries to avoid conflict with its biggest trading partner, the United States.

But this same pragmatism also leads China to pursue other policy goals at odds with the U.S. China professes to be genuinely worried about nuclear proliferation, for instance, yet U.S. diplomats have made no headway in persuading Beijing to back U.N. sanctions against Tehran. Perhaps not coincidentally, China imports 11.5% of its oil from Iran and is considering investing at least $70 billion to get more.

And it’s not just China competing for oil. Energy-poor Japan is highly dependent on Middle East oil and so was cool toward Israel for decades (relations are better now, but still low-key). India, meanwhile, with 17% of the world’s population and just 0.8% of known oil and gas reserves, is also racing to secure supplies. It hosted Venezuelan President (and Bush nemesis) Hugo Chavez last year and signed an oil deal with Venezuela. South Korea gets a third of its oil from Saudi Arabia and is trying to hedge its bets by investing in fields from Venezuela to Vietnam.

The rise of Asian powers - and their pursuit of policies designed to secure a steady supply of oil - is a geopolitical watershed, albeit a predictable one. Even if the U.S. were to reduce its oil dependency, its ability to act multilaterally could be constrained by the energy arrangements of other nations.

For these and other reasons, the development of alternative energy technologies that can reduce demand at home and be exported abroad is both an economic necessity and a national security priority. It’s far too important to be left to the environmentalists - or the states, the lobbyists (for nuclear power or ethanol) or even to philanthropists such as Richard Branson. In our globalized economies, lasting peace is unlikely without energy security.

World Oil Reserves and Supply Statistics

2009-08-25T23:33:00.000-07:00

Global oil resources are at times difficult to measure. World oil statistics are available from a variety of sources, but no one can make an accurate prediction of when and where new oil deposits will be found, or how much oil exists in these unknown locations. In order to be able to predict the date when oil supplies will run out, we need to have a grasp of how many supplies currently remain. Future geo-technologies may allow us to better analyze oil deposits, but until then we have to rely on the data we have. Here is a comprehensive listing of research sources for current oil supply statistics.

» Source: Peak Oil Statistics

Confessions of a Statistician
Article by Dr. Sohbet Karbuz, the former head of Non-OECD Energy Statistics Section of the International Energy Agency. Karbuz’s document examines the accuracy of oil statistics and the reliability of oil market forecasts.

EIA International Energy Data and Analysis
The Energy Information Administration’s official and comprehensive energy statistics from the US Government. Includes the Annual Energy Outlook 2006 with Projections to 2030.

Enerdata Yearbook
You have to purchase updated data, but their sample of statistical oil supply/demand for 2004 looks comprehensive (pdf files). Includes data about production, imports, exports and consumption. Also includes info about the production of oil products.

Fossil Energy and US Petroleum Reserves (DOE)
Some detailed (and updated) chart information about U.S. strategic oil reserves.

Oil Information Data Service
Several difficult to understand databases that list oil supply and demand statistics for OECD countries (including some non-OECD nations). Statistical information on this site is updated yearly in the month of August.

Oil Reserves - Wikipedia
As always, the Wikipedia is one of the most detailed resources for complete information and links to related websites.

Statistical Review of World Energy 2006
A BP Global website with some great statistical data in pdf format. BP has statistics data on oil production, natural gas production, and coal consumption. They also have some interesting tools such as the energy charting tool and conversion calculator.

The Oil Reserve Fallacy
Website that states “Proven reserves are not a measure of future supply”. They have some interesting comparson charts which examine oil supply estimates from four different sources.

WorldOil Industry Statistics
A simple U.S. based listing of statistical charts and forecast research articles, including a monthly chart of US Gas Prices and Trends.

It is quite apparent from this list of top statistics sources that oil supply and production statistics are hard to find and/or understand. This page will be updated as new information resources are found. If you know of any great statistical resources, please send us an email so we can add it to this page (email at bottom of site). You may also leave relevant and useful comments below.

American Oil Depletion in Canada

2009-08-25T23:26:00.000-07:00

Canadian oil wells supply a large percentage of American natural gas and oil imports. Satisfying America’s prodigious energy appetite depends on the continued availability of Canadian energy sources. About 25 percent of the crude oil and 80 percent of the natural gas imported into the United States come from our very accommodating neighbor to the north. More than half of the fuel pumped out of Canadian wells heads south to keep us Yankees warm and happily tooling about on our highways. What happens when Canada runs out of its oil and natural gas resources? What will this mean for the economies of both Canada and the United States? Even though the Canadian economy is no less dependent on hydrocarbon energy ...

North American Energy Consumption

Whenever the price of gas rises, North Americans begin to talk about driving less. Recent oil price trends have seen a noticeable reduction in SUV sales and have hit the large automobile manufacturers hard. Middle class America has been hit hardest by the rising cost of living; higher taxes and mortgages, car payments and the rising price of home and vehicle energy. Large suburban homes require large amounts of heat, electricity (for lighting) and air conditioning. Most households have two or more full-sized cars which are used to travel far distances for education and employment. All of these factors ...

Big Oil, Climate Bill, and Lies

2009-08-25T23:20:00.000-07:00

In case intentionally meddling with health care town halls wasn't distasteful enough for you, the opposition to the energy bill in Congress has taken up the same tactics. According to WSJ.com, "In the weeks before the U.S. Senate takes up climate-change legislation, the oil industry and other opponents of a proposed federal cap on carbon dioxide emissions seek to build a political firewall that will stop the legislation in its tracks." The tactic they used? To WSJ again: More than 3,000 oil company employees on Tuesday flocked to a downtown Houston venue to listen to anti-climate bill spokesmen. . . The attendees were handed yellow T-shirts with slogans like Higher energy taxes wipe out American jobs." A lot of them were bused in by their employers and asked to send letters to their Senat...

Cleantech Stocks vs. Oil

Cleantech investing isn't about finding the next big field or formation. It doesn't rely on finding the next property with enough oil to satiate global demand for — let's face it — a few months or, best case scenario, a year or two. In a world that consumes 60,000 barrels of oil per minute, large finds these days are the equivalent of adding a few drops of ketchup to the bottle that's been upside down in the fridge for weeks. At that rate, the 10.5 billion barrels of estimated recoverable oil in ANWR would last a whopping 121 days. And remember, that's expensive oil — not the cheap stuff that squirts out of the ground. The latter hardly exists anymore. Any bet on oil is really a referendum on when demand will once again outpace supply. It's a good bet, don't get me wrong. . . b...

US Refineries Under Cap & Trade

2009-08-25T23:18:00.000-07:00

A new study confirms my previous suspicions that the allocation of free emission allowances in the Waxman-Markey climate bill would disproportionately disadvantage the US oil sector, with serious consequences for our energy security. In particular, it quantifies the impact on the refining sector, which was chosen by the bill's authors as the focal point for collecting the "tax" on all carbon emissions from the use of petroleum products. In the view of EnSys Energy Systems, Inc., based on their model of global downstream petroleum markets, US refineries would run much less crude oil and be able to invest much less in modernization. As a result, US imports of refined products would grow significantly, despite lower overall consumption, and employment in the US refining sector would fall.

Investing in Oil

2009-08-25T23:14:00.001-07:00

If you've been expecting oil prices to plummet below $50 per barrel, you're probably going to be waiting around for quite a while. After watching crude prices find recent support around $65 per barrel, the question now is whether oil will finally find its legs at $75 a barrel. And if prices can rally past $75 a barrel, it's only a matter of time before we see $80 — or even $85 — per barrel. During the last few days, some readers have suggested $100 oil might be right around the corner... But there's a slight problem with that notion. Ever since oil prices fell as low as $33 per barrel late last year, OPEC has repeatedly said that $75 per barrel is the fair and reasonable price. Now that we're nearing that price, I don't see much momentum to hit triple-digits in the short run. Don't...

The End Of Fossil Fuel

2009-08-11T23:13:00.000-07:00

Prepare for a radically different lifestyle as global crude oil production peaks and begins to decline.

Chris Nelder

You will never see cheap gasoline again. You will probably never see cheap energy again. Oil, natural gas and coal are set to peak and go into decline within the next decade, and no technology can change that.Peaking is a simple concept. We generally exploit natural resources in a bell-shaped curve, with the rate of extraction increasing over time until we reach a peak and then gradually slowing down until we stop using them.
Peak oil is not about "running out of oil"; it's about reaching the peak rate of oil production. It's not the size of the tank that matters, but the size of the tap.

Read more about how soaring energy prices will transform our lives in our special report on $20 a Gallon.

The peak is usually reached when resources become too difficult to extract, or too expensive, or they are replaced by something cheaper, better or more plentiful. Unfortunately, we have no substitutes for oil that are cheaper or better.

According to the best available data, we are now at the peak rate of oil production. After over a century of continual growth, global conventional crude oil production topped out in 2005 at just over 74 million barrels per day (mbpd) and has remained at that level ever since.

$20 Per Gallon
The Debate
The End Of Fossil Fuel
Oil's Fading Relevance
Don't Bet On $800 A Barrel Oil
Book Excerpts
The Road To $20 A Gallon
A Skinnier, Safer America
Empty Skies
Revenge On The Big Box
Crude Oil Prices 1861 - 2009

Spectre of Peak Oil prices loom

2009-08-03T23:29:00.000-07:00

Oil at $200 a barrel is not far off and with it a new world order that will see the demise of globalization.

That prediction is put forward in a new book by well-known Canadian economist Jeff Rubin: Why Your World Is About To Get A Whole Lot Smaller.

Money, of course, makes the world go round and when transportation costs become punishing people start looking to buy local.

The author reasons that the price advantage currently held by low-wage countries will simply disappear.

And Rubin cites a second factor that substantiates his theory -- the introduction of carbon pricing.

The U.S. -- and Canada and presumably other developed countries -- soon will mandate a cap-and-trade scheme that would impose tariffs on goods deriving from nations that don't similarly restrict carbon emissions.

What this would mean is extra duties, or a pollution tax, on imports coming from places like China. Such tariffs again would negate the cost advantage of imports from low-wage countries.

All of which explains why North American labour unions are starting to find common cause with environmentalists, one example being the Blue Green Alliance, bringing together the Sierra Club and the United Steelworkers of America.

Here's the sort of calculation that's not lost on the three-year-old alliance: Higher transport costs flowing from $200-a-barrel oil would impose the equivalent of a 25 per cent tariff on Chinese imports, while a carbon tariff would be about 17 per cent. Presto -- a 42 per cent duty on Chinese goods.

The result? The potential revitalization of industrial sectors in Western countries that in recent years have bled jobs to foreign lands. Don't write off the American Rust Belt quite yet.

"At the same time as North American and European markets return to local sourcing," writes Rubin, "they will sever their trade links with the developing world and force that world to find another way to grow.

"As our world becomes smaller, their world becomes poorer."

This will cause economic havoc in the developing world, a situation that, predicts Rubin, will be further aggravated by the shutting off of a critical safety valve, migration.

Higher oil prices, after all, will mean more unemployment and fewer job openings in the developed world.

These predictions may seem a bit fanciful with oil at $60 a barrel, as it is now.

But Rubin, and most others, believe recent low oil prices are directly related to the ongoing recession and will surge again once economies start bouncing back.

The book, besides predicting a return of robust manufacturing and agricultural sectors in the developed world, is not a bearer of much good news.

The economist believes we are in for an era of repeated recessions, caused by ballooning oil prices that are inevitable given that oil reserves are in decline.

The only way to avoid such a fate is to wean ourselves off our debilitating addiction to petroleum.

Rubin's is one of a raft of books published in recent years warning of crisis and devastation if we fail to adapt to the fact that the aggressive burning of fossil fuels no longer is viable.

In view of all these dire warnings, citizens would be correct to wonder what exactly is on the reading lists of their politicians, who in their legislative priorities seem all but oblivious to the pending doom.

Peak Oil Debate

2009-08-03T23:17:00.000-07:00

Put a group of oil experts under one roof for a while and their discussion is likely to drift to the subject of peak oil — a point in time when maximum oil production is reached, after which it goes into permanent decline.

The advent of peak oil has long been brushed aside by some because it seems like a far-fetched, if not a ridiculous, idea concocted by alarmists. This is despite deafening cries that it is a real and serious threat.

Even among those who agree that it will happen, views differ sharply on the date . Some, like author David Strahan, say it could be as soon as 2017.

Recent data show that the debate can no longer be dismissed as a figment of the imagination among peak oil “enthusiasts”.

According to the Washington, US-based Worldwatch Institute, oil production is in decline in 33 of the 48 largest oil-producing countries. The research organisation says most of these countries are past their oil production peaks. Iran peaked in 1974, Nigeria in 1979, Venezuela in 1970 and Mexico in 2004.

Saudi Arabia, the world’s largest oil exporter, is expected to reach its peak in 2014, while in Iraq this is estimated in 2018.

Last year’s study by professional services group Ernst & Young showed that in the period between 2003-07, oil production in the US remained flat at about 1,2-million barrels a day.

Oil companies had difficulty in finding investment and production opportunities, say Ernst & Young.

But not everyone is convinced about peak oil. BP chief economist Christof Rühl says the argument for peak oil is baseless. “Peak oil has been predicted for 150 years. It has never happened, and will stay this way,” Rühl has reportedly said. He says oil is about price and not about availability.

Economist Tony Twine of consultants Econometrix echoes the view that price is everything.

“All energy — gas, oil and coal — is exploitable at a given price. If the price falls below a particular price it becomes worthless to produce. That is why I say many of the peak oil arguments are not well based.

“They all assume an oil price at 30, 60 or 200 a barrel,” he says. What is known as “oil availability” differs at different oil prices, Twine says.

“The projections that are being made about peak oil are sensible in particular contexts. But whether they are universally true is another matter,” he says.

Even in 30-50 years’ time, if oil demand is greater than supply, oil prices will rise “and currently unexploitable deposits will become viable to exploit”, Twine says. O il wells now considered marginal will become profitable .

Twine says there is a tendency to look at oil in terms of its energy content. “But there is a range of products that come out of a barrel of oil — from fertiliser to solvents that end up in paints, washing powder and synthetic fibres. Almost anything that you can see and feel has a little bit of oil in it.

“As oil becomes scarce and more expensive, its use as a source of energy will diminish. But its use as a feedstock for the chemicals industry will take longer to disappear,” Twine says.

Richard Worthington, climate change programme manager for the World Wildlife Fund in SA, says the advent of peak oil should influence how hydrocarbons are used. “It highlights the need for greater efficiency,” he says. C limate change considerations have supers eded peak oil discussions.

Worthington says fears of peak oil should not be the main driver of the move away from fossil- based energy sources. At some stage fossils will be depleted, he says. “Now there is talk of peak oil, then it will be peak energy and then peak coal,” he says.

Indeed, depletion of gas and coal reserves is a double whammy. National oil and gas company PetroSA’s Mossel Bay gas-to- liquids refinery is set to run out of natural gas by 2011.

The offshore fields south of Mossel Bay will not be able to keep up the supply of 36000 barrels a day the refinery needs.

The dwindling gas reserves are to be expected, says Twine.

“Gas and oil fields in SA and Mozambique have always been known to be constrained in terms of reserves. They have always been marginal in terms of big investment spending,” Twine says.

H owever, he believes that the Mozambique gas fields will have a longer life span and are likely to fuel petrochemicals group Sasol for a longer time. Sasol’s synfuels plant in Secunda gets natural gas from Mozambique through an 865km-long pipeline.

Peak Oil Blues

2009-07-19T23:46:00.000-07:00

Are you 'coping' or 'freaking out' about Peak Oil?

What's a 'normal' reaction to learning about a post-oil world?

Fear? Anxiety? Shock? Depression?

No one really knows.

Many people say preparation is "90% mental," but how do you separate out what's "mental preparation" from what's just "acting mental?"

Here we explore what we've learned about various emotional reactions.

Our goal is to help you build the kind of world you want to live in. Sanely.

Peak Oil Day

2009-07-19T23:42:00.000-07:00

On July 11, 2008, the price of a barrel of oil hit a record $147.27 in daily trading. That same month, world crude oil production achieved a record 74.8 million barrels per day.

For years prior to this, a growing legion of analysts had been arguing that world oil production would max out around the year 2010 and begin to decline for reasons having to do with geology (we have found and picked the world’s “low-hanging fruit” in terms of giant oilfields), as well as lack of drilling rigs and trained exploration geologists and engineers. “Peak Oil,” they insisted, would mark the end of the growth phase of industrial civilization, because economic expansion requires increasing amounts of high-quality energy.

During the period from 2005 to 2008, as oil’s price steadily rose, production remained stagnant. Though new sources of oil were coming on line, they barely made up for production declines in existing fields due to depletion. By mid-2008, as oil prices wafted to the stratosphere, every petroleum producer responded to the obvious incentive to pump every possible barrel. Production rates nudged upward for a couple of months, but then both prices and production fell as demand for oil collapsed.

Since then, with oil prices much lower, and with credit tight to unavailable, up to $150 billion of investments in the development of future petroleum production capacity have evaporated. This means that if a new record production level is to be achieved, further declines in production from existing fields have to be overcome, meaning that all of those canceled production projects, and many more in addition, will have to be quickly brought on-stream. It may not be physically possible to turn the tide at this point, given the fact that the new “plays” are technically demanding and therefore expensive to develop, and have limited productive potential.

On May 4 of this year, Raymond James Associates, a prominent brokerage specializing in energy investments, issued a report stating, “With OPEC oil production apparently having peaked in 1Q08, and non-OPEC even earlier in 2007, peak oil on a worldwide basis seems to have taken place in early 2008.” This conclusion is being echoed by a cadre of other analysts.

Maybe it’s a stretch to say that the production peak occurred at one identifiable moment, but attributing it to the day oil prices reached their high-water mark may be a useful way of fixing the event in our minds. So I suggest that we remember July 11, 2008 as Peak Oil Day.

We are now approaching the first-year anniversary of Peak Oil Day. Where are we now? The global economy is in tatters, yet oil prices have recovered somewhat (they’re now about half what they were in July 2008). World energy consumption is down, world trade is down, the airline industry is shrinking, and most of the world’s automakers are on life support.

It is too late to prepare for Peak Oil–a year too late, in fact. Now the name of the game is adaptation. We are in an entirely new economic environment, in which old assumptions about the inevitability of perpetual growth, and the usefulness of leveraging investments based on expectations of future growth, are crashing in flames. Even if economic activity picks up somewhat, this will occur in the context of an economy significantly smaller than the one that existed in July 2008, and energy scarcity will quickly cause most green shoots to wither.

It is impossible to say what will happen in the future with regard to oil prices. Clearly, very high prices kill demand by undercutting economic activity. Thus it is possible that the barrel price of petroleum may never break last year’s record. On the other hand, if the value of the dollar were to collapse, then the sky’s the limit for prices in dollars per barrel.

It is easier to forecast the oil supply trend: though we’ll see level-to-rising production temporarily from time to time, in general it’s down, down, downhill from now on.

Even though Peak Oil is now in the past, its annual commemoration on Peak Oil Day may serve an important purpose by reminding us why our economy is shrinking, and by focusing our thoughts on ways to facilitate the transition to a post-petroleum world.

What are some appropriate ways to commemorate
Mark your calendar. What will you be doing on July 11?

Help us “celebrate” Peak Oil Day by signing our petition.

Pyramid Oil Company Corrects Third-Party Information Regarding Oil and Gas Reserves

2009-05-16T07:06:00.001-07:00

Pyramid Oil Company (AMEX: PDO) today announced that as of January 1, 2008, the Company had estimated future net recoverable proved reserves (from both developed and undeveloped properties) of 806,000 barrels of crude oil, as was reported in the Company's Annual Report on Form 10-KSB with the Securities and Exchange Commission (SEC) on March 31, 2008, for the fiscal year ended December 31, 2007.On June 25, 2008, it was brought to the Company's attention that certain websites have incorrectly reported that, as of January 1, 2008, Pyramid had proved crude oil reserves of 806 million barrels of oil. Pyramid Oil had no involvement in the dissemination of this incorrect information and advises investors and other persons to rely only on the information that is contained in the company's Annual Report on Form 10-KSB, and its other filings with the SEC.About Pyramid Oil CompanyPyramid Oil Company has been in the oil and gas business continuously since incorporating in 1909. Pyramid acquires interests in land and producing properties through acquisition and lease, and then drills and/or operates crude or natural gas wells in an effort to discover or produce oil and/or natural gas. More information about the Company can be found at:http://www.pyramidoil.com/.Safe Harbor StatementCertain statements and information included in this press release constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995, including statements regarding the completion and tes1ting of wells. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to differ materially from forecasted results. Factors that could cause or contribute to such differences include, but are not limited to the value of crude oil or the performance of wells.CONTACTS:John H. AlexanderPresident and CEOPyramid Oil Company661-325-1000Geoff HighPrincipalPfeiffer High Investor Relations, Inc.303-393-7044(Source: Market Wire )

Ghana Oil Company Limited (GOIL)

2009-05-16T07:05:00.000-07:00

Ghana Oil Company Limited (GOIL) was established on 14th June 1960 under the Companies Ordinance (CAP 193) as AGIP Ghana Limited with AGIP S.P.A of Italy having 855,000 shares and SNAM SPA also of Italy with 95,000 shares. On the 16th December 1968 the 95,000-shares were transferred to Hydrocarbons International Holdings of Zurich. The Company is now fully owned by the government of Ghana which acquired it in 1974. Ministry of Energy represents the government in all its dealings with the Company.The Company’s main business is marketing and distribution of petroleum products in Ghana. The biggest chunk of its sales comes from the sale of Diesel and Gasoline. The Company is manned by a nine member management team headed by the Managing Director.The marketing arms of the company are represented by four zonal offices namely the Zonal Office South, Middle Belt (Kumasi), West (Takoradi) and North (Tamale). These offices also serve as distribution points for the company’s products. However, the main distribution points are Liaison Office, Central Depot, and the Accra Plains Depot all within the Tema catchment area.

KEROSENE / HEATING OIL

2009-05-16T07:04:00.000-07:00

Kerosene, also known as burning oil, 28 second heating oil, industrial paraffin, C2 kero and standard kero, is used for domestic heating and industrial processes requiring low sulphur fuel.We can deliver Kerosene in any size of vehicle ranging from our 500 litre baby tanker right through to one of our 36,000 litre articulated tankers. Whatever the access restrictions you may have for the supply of your kerosene, we have the means to get it to you.At Crown Oil, we focus on exceptional personal service and consistency of delivery service, to ensure buying heating oil from us is quick, easy and delivery is on time.To ensure you never run out of fuel, we can calculate your optimum ordering pattern over a given time period and then “top-up” your tank to ensure you benefit from the lower price associated with larger deliveries whilst ensuring a run out does not occur. This will let us take the worry out of ordering your oil.With over 60 years of experience, Crown Oil has become an expert in managing and delivering heating oil to its domestic customers.For more information please go to our kerosene page

Oil Information Company

2009-05-16T07:03:00.002-07:00

Welcome

Economic View: Running on empty: peak oil production is in sight, global supplies will dwindle - and the US, for one, is ill-prepared

2009-05-16T07:03:00.001-07:00

China's rapid growth in consumption could suck up all the extra crude pumped next year, leaving other countries to get by with less

Hamish McRae

Sunday, 11 November 2007
The oil price will go through $100 a barrel at some stage in the next few months, maybe in the next few days. One consequence, petrol at £1 a litre, is already with us. The climb is surprising, at least to the oil companies, who a couple of years ago were still expecting an oil price of below $50 a barrel, and doing all their planning on that basis. But, in a way, it is more surprising that the world economy has managed to carry on growing strongly despite this rise. For the oil price affects not only energy prices; oil also is the feedstock for plastics and other products we use every day.
Related Article
'The era of cheap oil is dead': $100 a barrel is on the way

Falling oil production 'is greater threat to Britain than terrorism'

2009-05-16T07:02:00.001-07:00

By Jon Swain

Last Updated: 7:15PM GMT 29 Oct 2008

Britain could face an oil crisis within five years, says The Peak Oil Group Photo: EPA

The Peak Oil group warned in a report that the country could begin feeling the effects of a severe lack of oil within five years, as oil-producing countries will be forced to wind down production due to diminished reserves.Jeremy Leggett, the chairman of the Peak Oil Group and the executive chairman of the alternative energy company Solarcentury, said there was still time for the Government to act to protect the country from the impact of reduced oil supplies by reducing the economy's dependence on the fuel.

Related Articles

Oil shortage "bigger threat to UK than terrorism"
Navy frigates defend world oil prices
Gordon Brown warns of oil price rise amid economic downturn
Gordon Brown is to blame over British fuel prices, Opec chief says
Global oil supply will 'peak in 2020' due to credit crisis, warns expert
The only answer to the fuel crisis

Mr Leggett, who is a former oil company executive, said: "Society has become oil-dependent to its rivets. "What we are warning of is a peak in production beyond which will be a fall, potentially a rapid fall, and that will mean a global energy crisis if the analysis is correct."He said that oil companies had deluded themselves and governments about their ability to continue producing at present levels in order to maximise short-term financial gain, comparing their behaviour to banks whose actions caused the global economic crisis."What we are arguing is that the oil industry and oil institutions have been irrationally exuberant about their ability to meet demand going forward, in much the same way that the financial institutions have been irrationally exuberant about their ability to manage complex financial instruments," Mr Leggett told BBC Radio 4's Today programme.Mr Leggett, whose book Half Empty expands upon his vision of a looming international catastrophe due to an emptying of global oil reserves, said he was pessimistic that innovations in oil exploration, including the tapping of tar sands, could prevent disaster."When they fail to meet demand, many countries will experience this as an energy crisis. Some will experience it as an energy famine, as producers start to withhold exports," he said.However, he said that if governments recognised the coming changes, there was still time for economies to be shaped around alternatives to oil. "This crisis is being anticipated," he said. "Let's do something about it, because we can."

UK Oil Reserves and Estimated Ultimate Recovery 2008

2009-05-16T07:01:00.001-07:00

Stacked Graph To Show Change in Oil Reserves and Production from 1979 to 2007

Introduction :-

Reserves data were collected from each UKCS operator during January to March 2008. Oil reserves include both oil and the liquids obtained from gas fields. Oil reserves are summed in the Oil Table below at different probability levels to give a range of estimates from proven to the maximum level.The oil reserves presented are in both sanctioned fields (i.e. fields in production or approved fields under development but not yet producing) and other significant discoveries not yet fully appraised. The latter comprise discoveries for which there is an intended field development and a provisional start date. Proven, probable and possible reserves for a large number of individual fields have simply been summed to give the totals shown. There is, thus, a much smaller likelihood that the true figure for total oil reserves is outside the range of estimates than when considering probabilities for an individual field.Cumulative oil production to the end of 2007 has been added to oil reserves (remaining) to give the estimated ultimate recovery figures.Reserves and Estimated Ultimate Recovery in the Oil Table are presented in metric units (million tonnes) to facilitate comparison with other energy resources and the inclusion of natural gas liquids. The figures in the table can be converted to "field units" using the approximate conversion factor of 1 tonne of crude oil = 7.5 barrels.

John Webber

Email: john.webber@berr.gsi.gov.uk

phone: +44 (0) 1224 254069

fax: +44 (0) 1224 254018

Peak oil

2009-05-16T06:59:00.000-07:00

Peak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. The concept is based on the observed production rates of individual oil wells, and the combined production rate of a field of related oil wells. The aggregate production rate from an oil field over time usually grows exponentially until the rate peaks and then declines—sometimes rapidly—until the field is depleted. This concept is derived from the Hubbert curve, and has been shown to be applicable to the sum of a nation’s domestic production rate, and is similarly applied to the global rate of petroleum production. Peak oil is often confused with oil depletion; peak oil is the point of maximum production while depletion refers to a period of falling reserves and supply.

M. King Hubbert created and first used the models behind peak oil in 1956 to accurately predict that United States oil production would peak between 1965 and 1970.^[1] His logistic model, now called Hubbert peak theory, and its variants have described with reasonable accuracy the peak and decline of production from oil wells, fields, regions, and countries,^[2] and has also proved useful in other limited-resource production-domains. According to the Hubbert model, the production rate of a limited resource will follow a roughly symmetrical bell-shaped curve based on the limits of exploitability and market pressures. Various modified versions of his original logistic model are used, using more complex functions to allow for real world factors. While each version is applied to a specific domain, the central features of the Hubbert curve (that production stops rising, flattens and then declines) remain unchanged, albeit with different profiles.

Some observers, such as petroleum industry experts Kenneth S. Deffeyes and Matthew Simmons, believe the high dependence of most modern industrial transport, agricultural and industrial systems on the relative low cost and high availability of oil will cause the post-peak production decline and possible severe increases in the price of oil to have negative implications for the global economy. Predictions vary greatly as to what exactly these negative effects would be.

If political and economic changes only occur in reaction to high prices and shortages rather than in reaction to the threat of a peak, then the degree of economic damage to importing countries will largely depend on how rapidly oil imports decline post-peak. According to the Export Land Model, oil exports drop much more quickly than production drops due to domestic consumption increases in exporting countries. Supply shortfalls would cause extreme price inflation, unless demand is mitigated with planned conservation measures and use of alternatives.^[3]

Optimistic estimations of peak production forecast the global decline will begin by 2020 or later, and assume major investments in alternatives will occur before a crisis, without requiring major changes in the lifestyle of heavily oil-consuming nations. These models show the price of oil at first escalating and then retreating as other types of fuel and energy sources are used.^[4]

Pessimistic predictions of future oil production operate on the thesis that either the peak has already occurred,^[5]^[6]^[7] we are on the cusp of the peak, or that it will occur shortly^[8] and, as proactive mitigation may no longer be an option, predict a global depression, perhaps even initiating a chain reaction of the various feedback mechanisms in the global market which might stimulate a collapse of global industrial civilization, potentially leading to large population declines within a short period. Throughout the first two quarters of 2008, there were signs that a possible US recession was being made worse by a series of record oil prices.^[9]^{[citation needed]}