Insight and inspiration in turbulent times.
A mid-week update. New York oil prices, which have climbed 10 percent since early January, jumped againon Wednesday after the EIA reported that stocks at Cushing, Okla. fell by 2.7 million barrels last week as the newly opened leg of the Keystone pipeline continuing to drain oil to the Gulf Coast.
A mid-week review. This week’s US stocks report contained many surprises and reported several new recent records.
I believe that the Syrian regime’s use of chemical weapons is merely a pretext for American intervention. One always suspects that oil is the real issue when it comes to the Middle East. So, let’s see if that’s the case here.
Over the last eight years, the predictions of the "moderates" in the peak oil debate came closest. We certainly don’t live in the pre-2004 world any more. Oil prices are high, and there seems little prospect that they will ever fall below $100/barrel for any sustained period. Furthermore, the situation remains very vulnerable to disruption.
The combined crude oil production of the five main international oil companies (Exxon, BP, Shell, Chevron and Total) hit an historic high in 2004. Since then, it has fallen by 25.8%, despite large increases in investments.
Nate Hagens draws my attention to this recent interview with Dennis Meadows, lead author of the famous Limits to Growth series of books. Meadows is very pessimistic. I was particularly interested in his views on oil production and peak oil, in which he states positively that peak oil is in the past (which is very arguable at best, given that oil production is still making new monthly highs), and also that "Oil production will be reduced approximately by half in the next 20 years, even with the exploitation of oil sands or shale oil."
On 12 November the IEA’s World Energy Outlook report for 2012 (WEO-2012) was presented by the chief economist of that organisation, Dr Fatih Birol. When he did so there was one idea that the journalists in the audience latched on to – that by 2020 the USA would become the world’s largest oil producer. The USA would even produce more oil than Saudi Arabia!
Before I discuss the logic behind negating a peak of production of anything, let me sum up where we are in the U.S. in terms of crude oil production.
