Military Study Warns of a Potentially Drastic Oil Crisis

Message: Be nice to countries that export oil

A study by a German military think tank has analyzed how "peak oil" might change the global economy ...

The study is a product of the Future Analysis department of the Bundeswehr Transformation Center, a think tank tasked with fixing a direction for the German military.

The team of authors, led by Lieutenant Colonel Thomas Will, uses sometimes-dramatic language to depict the consequences of an irreversible depletion of raw materials. It warns of shifts in the global balance of power, of the formation of new relationships based on interdependency, of a decline in importance of the western industrial nations, of the "total collapse of the markets" and of serious political and economic crises ...

According to the German report, there is "some probability that peak oil will occur around the year 2010 and that the impact on security is expected to be felt 15 to 30 years later."

The Bundeswehr prediction is consistent with those of well-known scientists who assume global oil production has either already passed its peak or will do so this year ...

The scenarios outlined by the Bundeswehr Transformation Center are drastic.

Even more explosive politically are recommendations to the government that the energy experts have put forward based on these scenarios.

They argue that "states dependent on oil imports" will be forced to "show more pragmatism toward oil-producing states in their foreign policy."

Political priorities will have to be somewhat subordinated, they claim, to the overriding concern of securing energy supplies ...

Der Spiegel  01 Sept 2010    Energy Policy    War on Terror

Risk-Taking Rises as Oil Rigs in Gulf Drill Deeper

The $3 billion rig, called Perdido, can pump oil from dozens of wells nearly two miles under the sea while simultaneously drilling new ones.

It is part of a wave of ultra-deep platforms — all far more sophisticated than the rig that was used to drill the ill-fated BP well that blew up in April.

These platforms have sprung up far from shore and have pushed the frontiers of technology in the gulf, a region that now accounts for a quarter of the nation’s oil output.

Major offshore accidents are not common. But whether through equipment failure or human error, the risks increase as the rigs get larger and more complicated.

Yet even as regulators investigate the causes of the Deepwater Horizon disaster, the broader dangers posed by the industry’s push into deeper waters have gone largely unscrutinized ...

NYT  29 Aug 2010    Deepwater Horizon    Peak Oil: Not If but When

BP frozen out of Arctic oil drilling race

BP has been forced to abandon hopes of drilling in the Arctic, currently the centre of a new oil rush due to its tarnished reputation following the Gulf of Mexico spill ...

There will be another round of bidding for drilling off Greenland next year and the year after, but BP's reverse this week shows that it will be difficult for the firm to secure future exploration licences in the area.

Environmentalists are particularly nervous about plans to open up Arctic seas for exploration because the cold conditions would make a spill far more damaging.

Last month, a report by US government scientists concluded that a quarter of the 4.9m barrels of oil estimated to have been spilled in the warm waters of the Gulf of Mexico had evaporated or dissolved.

Oil spilled in the Arctic would be far harder to disperse and break down.

Despite the Deepwater Horizon disaster, major oil companies – BP included — still hope to begin drilling in the Arctic off the coast of North America soon.

The US president, Barack Obama, opened up US waters there to exploration shortly before the Deepwater Horizon explosion but suspended the plans while investigations into the disaster took place.

Last month, BP, Exxon Mobil and Imperial Oil formed a joint venture to explore for oil and gas in the Beaufort Sea in Canada's Arctic.

The oil industry is already lobbying against new safety regulations requiring them to drill a relief well at the same time as they drill an exploration well in order to speedily plug any leak.

Guardian  25 Aug 2010    Eating the Future

Azolla event

Job Losses Over Drilling Ban Fail to Materialize

"Global deepwater oil production is expected to double by 2030"

Deepwater oil drilling has played an increasingly important role in world energy markets in recent years, and that has not changed after several accidents in the waters of Australia, Britain, Mexico and the United States.

Since 2006, nearly half the total oil and gas reserves added worldwide have been in deepwater areas.

Six million barrels of oil a day, or 7 percent of total global production, are now produced in deepwater areas.

Global deepwater oil production is expected to double by 2030.

With the world becoming increasingly dependent on deepwater oil supplies, the BP spill has so far had a very limited effect on drilling around the world.

Britain has stepped up inspections of offshore rigs. Brazil has announced a safety review that will take a year to complete before it makes any regulatory changes related to its fast-growing offshore drilling industry. Angola has increased inspections.

But there are few signs of any slowdown in drilling.

In Norway, which already has strong regulations, the BP accident at first shook the industry.

An auction of about 100 offshore lots was initially postponed, but in the end, only six lots in environmentally sensitive areas were kept off limits.

In Nigeria and Ghana, some government officials have expressed caution about deepwater drilling, but there have been no significant delays ...

NYT  24 Aug 2010    Deepwater Horizon

Cairn Energy finds oil signs off Greenland

Cairn Energy has discovered gas off the coast of Greenland, a sign that could lead to a possible oil discovery.

Edinburgh-based Cairn, the only firm to have been given permission to drill for oil offshore in Greenland, said it had "early indications of a working hydrocarbon system" in Baffin Bay.

But environmental campaigners have raised concerns in the wake of BP's Gulf of Mexico oil spill disaster.

Greenpeace said the announcement was "grave news".

The group says it threatens the fragile Arctic environment, and has sent a protest ship to Baffin Bay.

BBC NEWS  24 Aug 2010    Eating the Future    Energy Policy

Peak oil alarm revealed by secret official talks

Greenpeace warns oil rush would damage Greenland

Cairn confirms Greenland oil find

Energy firm 'discovers oil' off Greenland

Greenpeace mobilises

Peak oil alarm revealed by secret official talks

The race for the Arctic's natural resources

The Peak of the Oil Age – The Uppsala World Energy Outlook

Peak oil alarm revealed by secret official talks

Behind government dismissals of 'alarmist' fears there is growing concern over critical future energy supplies ... ... documents obtained under the FoI Act seen by the Observer show that a "peak oil workshop" brought together staff from the DECC, the Bank of England and Ministry of Defence among others to discuss the issue.

A ministry note of that summit warned that "[Government] public lines on peak oil are 'not quite right'. They need to take account of climate change and put more emphasis on reducing demand and also the fact that peak oil may increase volatility in the market."

Those comments were written 12 months ago, but a letter in response to the FoI request written by DECC officials and dated 31 July 2010 says it can only release some information on what is currently under policy discussion because they are "ongoing" and "high profile" in nature.

The letter adds: "We recognise the public interest arguments in favour of disclosing this information. In particular we recognise that greater transparency makes government more open and accountable and could help provide an insight into peak oil.

"However any public interest in the disclosure of such information must be balanced with the need to ensure that ministers and advisers can discuss policy in a manner which allows for frank exchanges of views and opinions about important and sensitive issues."

... suggests officials stick to the line that the "International Energy Agency is an authoritative source in this field" and stresses how the IEA believes there is sufficient reserves to meet demand till 2030 as long as investment in new reserves is maintained ... ...

Guardian  22 Aug 2010        

Ecuador pledges no oil drilling in Amazon reserve

I wonder how long a decade will last now all that oil's been lost in the Gulf?

Ecuador has agreed to refrain from drilling for oil in a pristine Amazon rainforest reserve in return for up to $3.6bn (£2.26bn) in payments from rich countries.

Under a pioneering agreement signed with the United Nations, the oilfields under the Yasuni reserve will remain untapped for at least a decade.

The money is about half of what Ecuador would make by selling the oil.

The Yasuni reserve is one of the most biodiverse regions on earth.

Measuring 10,000 square km, it supports a huge variety of wildlife, incuding uniques species of birds, moneys and amphibians.

The reserve is also home to indigenous tribes, who have welcomed the deal to protect their territory from oil development ...

BBC NEWS  04 Aug 2010    Eating the Future

Yasuní and oil exploitation

Yasuni National Park

Clandestine Oil Road

Oil industry safety record blown open

National Wildlife Federation says catalogue of oil industry accidents proves BP disaster in Gulf of Mexico is not a one-off ...

In a further grim reminder, the American midwest was in the throes of its own environmental disaster today, with a ruptured pipeline gushing gallons of oil into Michigan's Kalamazoo River.

Enbridge Energy, which is Canadian-owned but based in Houston, said the spill may have reached 1m gallons. Federal government officials in Washington and the state of Michigan were struggling to stop the oil from reaching the Great Lakes ...

The report from the National Wildlife Federation drew on records from the Minerals Management Service, which regulates offshore drilling, and the Environmental Protection Agency, to come up with a figure of 1,440 offshore leaks, blowouts, and other accidents were reported between 2001-2007.

In addition to environmental damage, these caused 41 deaths and 302 injuries.

The safety record for onshore activities was even more dismal.

Some 2,554 pipeline accidents occurred between 2001 and 2007, killing 161 people and injuring 576 ...

Guardian  29 July 2010    Corporate Sociopathy Log    Eating the Future

Assault on America

Cairn Energy's Arctic oil drilling plan condemned

BP set to begin oil drilling off Libya

BP spokesman David Nicholas told AFP news agency on Saturday:

"We expect to begin the first well in the next few weeks", adding that the wells "can take six months or more to drill".

The Libyan well is deeper than the well that ruptured under the Deepwater Horizon rig in the Gulf of Mexico.

Deepwater Horizon blew up on 20 April, killing 11 workers.

Mr Nicholas said: "If there are any lessons obviously that come out of the investigation into what happened on the Deepwater Horizon, we will apply those to our drillings across the world." ...

BBC NEWS  24 July 2010

Deepwater Horizon

Oil explorers rush to North Sea as price rises fuel drilling boom

Earlier this year, the Department of Energy and Climate Change (DECC) received bids for 365 blocks in the 26th licensing round for exploration, the biggest show of interest from the industry since 1964 ...

Independent  08 July 2010    Peak Oil

Shell: deep-water oil drilling will go on

Royal Dutch Shell's boss, Peter Voser, insisted that today it was not possible to satisfy the world's growing energy demands without drilling for oil in deep-water reserves, despite the ongoing environmental disaster in the Gulf of Mexico ...

... Voser defended the oil industry's push into deeper oil reserves and said Shell would continue to play its part, even as a tropical storm threatened to disrupt BP's efforts to clean up oil off the coast of Louisiana.

"Given the rise in the population and the rise in the developing world of energy needs, we will have to develop those resources in deep waters, so my expectation is that we will go forward with it, but it will need some changes," Voser told the Fortune Global Forum in Cape Town ...

BP's failure to cap the [Deepwater Horizon] leak has put the oil industry's safety record under fierce scrutiny, with environmental campaigners demanding that deep-water drilling is banned until safety measures have been improved.

Voser, though, implied that the Macondo well would not have erupted with such devastating consequences if Shell, rather than BP, had been in charge ...

Guardian  27 June 2010    Deepwater Horizon    Eating the Future

Shell's subtle switch from renewables ...

Shell dumps wind, solar and hydro power in favour of biofuels

Shell’s Game

Royal Dutch Shell

BP Is Pursuing Alaska Drilling

... about three miles off the coast of Alaska, BP is moving ahead with a controversial and potentially record-setting project to drill two miles under the sea and then six to eight miles horizontally to reach what is believed to be a 100-million-barrel reservoir of oil under federal waters.

All other new projects in the Arctic have been halted by the Obama administration’s moratorium on offshore drilling, including more traditional projects like Shell Oil’s plans to drill three wells in the Chukchi Sea and two in the Beaufort.

But BP’s project, called Liberty, has been exempted as regulators have granted it status as an “onshore” project even though it is about three miles off the coast in the Beaufort Sea.

The reason: it sits on an artificial island — a 31-acre pile of gravel in about 22 feet of water — built by BP ...

Rather than conducting their own independent analysis, federal regulators, in a break from usual practice, allowed BP in 2007 to write its own environmental review for the project ...

... scientists and other critics say they are worried about a replay of the disaster in the Gulf of Mexico because the Liberty project involves a method of drilling called extended reach that experts say is more prone to the types of gas kicks that triggered the explosion on the Deepwater Horizon ...

NYT  23 June 2010    Deepwater Horizon

Liberty Development Project

Barack Obama compares oil spill to 9/11

Buried beneath reactions to the comparison with 9/11, Obama seems to have got the real message from the Deepwater Horizon catastrophe

In the Politico interview, Obama vowed to "move forward in a bold way in a direction that finally gives us the kind of future-oriented, visionary energy policy we so vitally need and has been absent for so long".

"One of the biggest leadership challenges for me is going to be to make sure we draw the right lessons from this disaster."

Obama said he could not predict whether the US would make a complete transition from an oil-based economy within his lifetime.

"Now is the time for us to start making that transition and investing in a new way of doing business when it comes to energy," he said.

"I have no idea what new energy sources are going to be available, what technologies might drive down the price of renewable energies.

What we can predict is that the availability of fossil fuel is going to be diminishing; that it's going to get more expensive to recover; that there are going to be environmental costs that our children ... our grandchildren and our great-grandchildren are going to have to bear."

Guardian  14 June 2010    Alternatives to Fossil Fuel    Deepwater Horizon

Barack Obama calls for clean-energy push

Anger over Obama block on Gulf of Mexico oil drilling after BP disaster

Time to find something else to go in the gas tank: like clean electricity and/or hydrogen

Gulf coast communities face loss of 46,000 jobs thanks to moratorium pending BP inquiry ...

A decision by Barack Obama to slap a block on deepwater exploration in the Gulf of Mexico has angered the energy industry and crisis-hit communities that rely on rigs for lucrative jobs.

In a move barely noticed by the public ... the White House ordered a six-month moratorium on deepwater drilling, pending new safety standards that will be drawn up by a special presidential commission charged with scrutinising the causes of the worst slick ever to blight America's oceans.

The move was applauded by environmentalists ... the Sierra Club, said the disaster was a wake-up call: "It's time to take offshore drilling off the table for good."

But the move comes at a cost. It will mean a halt to work on 33 drilling platforms, jeopardising as many as 46,000 jobs on land and sea, according to industry figures.

Those rigs, leased by oil companies at a typical cost of $500,000 a day (£340,000), are likely to be loaded onto ships and taken elsewhere – possibly to Brazil, India or the west coast of Africa, where wells are waiting to be drilled ...

ikesolem
9 Jun 2010, 5:37PM

A renewable energy industry would more than replace all those jobs - and what about the thousands of tourism and fishing related jobs that have been lost as the result of the spill?

For example: offshore wind turbines, algal biofuel production and refining, solar panel manufacturing and installation - all largely pollution-free, especially relative to deepwater blowouts.

The pay is similar, the work is less dangerous, and there is no risk of destroying the tourism and fishing industry - so don't listen to the lobbyists for fossil fuels who tell you there is no other alternative.

Guardian  09 June 2010    Corporare Sociopathy Log    Deepwater Horizon

Obama orders six-month freeze on offshore drilling

Shell seeks to drill in Arctic seas this summer

What's the world going to do when the 27bn barrels have been used up?

• Shell ignores calls for moratorium on drilling
• Company says world needs 27bn barrel resource ...

Guardian  18 May 2010    Eating the Future

Despite Moratorium, Drilling Projects Move Ahead

Danger for Florida

Barack Obama to allow offshore oil drilling

US president will modify 20-year ban to exploit reserves off Virginia's coast as officials claim plan will end reliance on fuel imports ...

okubax
31 Mar 2010, 5:22PM

... America needs to be self sufficient on it's energy needs and this is just one way to go about it, why have oil lying dormant in your backyard when you can use it.

So what most of you are implying is that America doesn't have the right to drill for oil in it's own offshore locations because of climate change ? .....please!

Whether most of you like it or not, oil and its derivatives are still going to be the primary source of energy for nations for decades to come.

Guardian  31 Mar 2010

BP profits jump after oil price rise

"We still need oil and gas" Manouchehr Takin tells The Guardian. And there's the problem: as demand expands, the need to replace these two finite resources with sustainable substitutes becomes more imperative. Instead, the search is directed at finding gas and oil reserves in "more hostile and challenging environments", probably because no current form of 'renewables' will replace the multiplicity of jobs which gas and oil perform.

BP has smashed City forecasts with a 135% jump in profits, thanks to rising oil prices.

The energy giant reported profits of $5.6bn (£3.6bn) in the first three months of 2010, up from $2.4bn a year ago ...

Guardian  27 Apr 2010

Oil rig sinking puts 'bad boy' industry in spotlight again

Deepwater Horizon disaster reflects the increasing danger in extracting reserves from more and more hostile environments ...

The Gulf of Mexico accident has once again focused attention on the industry's safety record as oil companies drill ever deeper and in more hostile and challenging environments.

Although figures for global safety show improvement in recent years, the data masks some worrying trends.

In 2008, the most recent data available from the International Association of Oil and Gas Producers (OGP), the injury rate for workers involved in exploring for oil and gas was one-third higher than the average for the previous five years; in Africa this rate was four times higher.

With companies pushing the boundaries of exploration to regions such as northern Siberia, it is no surprise that fatality rates are on the rise.

Exploration is particularly risky because it often involves drilling in areas which have not been mapped, so little is known about the geology and about any hydrocarbons lying beneath the seabed.

... Manouchehr Takin of the Centre for Global Energy Studies said:

"Perhaps I'm biased. But accidents like this one will amplify the image of the industry as a bad boy. That is unfair, I think. We still need oil and gas."

Guardian  26 Apr 2010    Corporate Sociopathy

Deepwater Horizon oil rig explosion

Natural gas reserves

US military warns oil output may dip causing massive shortages by 2015

• Shortfall could reach 10m barrels a day, report says
• Cost of crude oil is predicted to top $100 a barrel ...

The US military has warned that surplus oil production capacity could disappear within two years and there could be serious shortages by 2015 with a significant economic and political impact.

The energy crisis outlined in a Joint Operating Environment report from the US Joint Forces Command, comes as the price of petrol in Britain reaches record levels and the cost of crude is predicted to soon top $100 a barrel.

"By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day," says the report, which has a foreword by a senior commander, General James N Mattis.

It adds: "While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds.

Such an economic slowdown would exacerbate other unresolved tensions, push fragile and failing states further down the path toward collapse, and perhaps have serious economic impact on both China and India." ...

Guardian  11 Apr 2010

Oil prices are 'overheated' - IEA

Oil

Energy minister will hold summit to calm rising fears over peak oil

Lord Hunt calls UK industrialists together to discuss government response to any early onset of decline in global oil production ...

In a significant policy shift, the government has agreed to undertake more work on whether the UK needs to take action to avoid the massive dislocation that could be caused by the early onset of "peak oil" – the point that marks the start of terminal decline in global oil production.

Jeremy Leggett, the executive chairman of the renewable power company Solar Century and a leading figure in the UK industry taskforce on peak oil and energy security, said the meeting, to be held at the Energy Institute, showed a welcome new sense of urgency ...

Ian Marchant, Scottish and Southern Energy's chief executive, is one who now believes global demand for oil is on the brink of outstripping the ability to produce it.

At the launch of the Oil Crunch report, he said: "The west has been far too profligate in its use of oil and the price is going to say: stop it now and start using your oil as a scarce commodity."

Guardian  21 Mar 2010

Peak Oil

China's oil demand increase 'astonishing'

China's demand for oil jumped by an "astonishing" 28% in January compared with the same month a year earlier, the International Energy Agency (IEA) says.

The body added that demand for oil in 2010 would be underpinned by rising demand from emerging markets, with half of all growth coming from Asia.

But the IEA predicted demand in developed countries would fall by 0.3%.

The IEA has increased its global oil demand forecast for 2010 by 1.8% to 86.6 million barrels a day ...

BBC NEWS  12 Mar 2010    China

Oil price up amid jobs joy in US

Key oil figures were distorted by US pressure

Government must 'take back control' of North Sea oil and gas production

Peter Odell, a professor at Erasmus University in Rotterdam and an adviser to the Opec oil cartel, wants a state-controlled strategic offshore hydrocarbons authority to ensure big oil companies work more in the national interest ...

... he argues: "UK oil and gas production has been steadily declining since 1999. The reason is that the UK government, unlike those of most other countries, has abandoned oil and gas production to the private sector and has failed to create attractive conditions for private companies to invest more."

He adds: "The government should follow the example of Norway and many other countries by setting up a hydrocarbons authority, which would initiate new private-public partnerships to engage in offshore oil and gas production. This would generate many billions of pounds in highly needed revenues." ...

Britain and Norway took very different paths in the development of the North Sea, with the UK initially using state-owned groups, such as the British National Oil Corporation and a partly state-owned BP.

These government stakes were gradually sold off, while Oslo has kept a much tighter rein on its sector and built up a massive sovereign wealth fund with the proceeds ...

Guardian  07 Mar 2010

New car registrations up 26% on February 2009

But the February 2010 total of new registrations was 1.3% below 2008's figure and 12.2% below the 10-year average for February ...

Announcing the figures today, the Society of Motor Manufacturers and Traders (SMMT) said the government's soon-to-end car scrappage scheme had accounted for 19.6% of the February 2010 new car market.

Today's figures were boosted by the fact that this time last year the motor industry was suffering a downturn in demand and production.

It was the introduction of the scrappage scheme which eventually reversed a trend which had seen year-on-year sales fall for 15 successive months.

SMMT chief executive Paul Everitt said: "Scrappage has generated eight consecutive months of growth in the new car market and we expect its benefits to stretch beyond the scheme's closure later this month.

"The industry continues to face challenging market conditions, but positive trends in the fleet and business sectors suggest that negative impacts can be minimised. Strengthening business and consumer confidence remains industry's priority.

"A clear and consistent approach to CO2-based taxation and improved access to affordable credit are essential elements in sustaining recovery in the new car market." ...

Guardian  04 Mar 2010    Eating the Future

Barclays and Bank of America see looming oil crunch

Bank of America and Barclays Capital, two leading oil traders, have told clients to brace for crude above $100 (£64) a barrel by next year, before it pushes relentlessly higher over the decade.

This is a stark contrast from recessions in the 1980s and 1990s, when it took years to work off excess drilling capacity built in the boom.

"Oil has the potential to flirt with $100 this year. We forecast an average price of $137 by 2015," said Amrita Sen, an oil expert at BarCap. The price has doubled to $78 in the last year.

"The groundwork for the next sustained step up in oil prices is now almost complete. Global spare capacity is likely to be reduced to low levels within a relatively short time. The global economic crisis has postponed, but not cancelled, a crunch which would otherwise be starting to bite now," said Barclays.

Francisco Blanch, from Bank of America Merrill Lynch, said crude may touch $105 next year, with $150 in sight by 2014. "Approximately 1.7bn consumers in emerging markets with a per capita income of $5,000 to $20,000 are eagerly waiting to buy cars, air-conditioning units, or white goods," he said ...

Telegraph  18 Feb 2010

Britain faces 'oil crunch' within five years

Oil shortages by 2020 due to Western 'profligacy'

Argentina imposes shipping rules in Falklands oil row

Argentina has imposed new controls on shipping to the Falkland Islands in a growing oil dispute with the UK ...

The Argentine government has ordered ships heading to the islands via its waters to apply for permission first.

The move comes as Argentina has become increasingly agitated at the forthcoming start of oil drilling in Falkland Islands territorial waters ...

A drilling rig from the Scottish highlands, the Ocean Guardian, is expected to arrive in the coming weeks to begin oil exploration ...

BBC NEWS  17 Feb 2010

Chances of finding Falklands oil are slim

Oil billions beckon Falkland Islands

Branson warns that oil crunch is coming within five years

Sir Richard Branson and fellow leading businessmen will warn ministers this week that the world is running out of oil and faces an oil crunch within five years ...

"The next five years will see us face another crunch – the oil crunch. This time, we do have the chance to prepare. The challenge is to use that time well," Branson will say.

"Our message to government and businesses is clear: act," he says in a foreword to a new report on the crisis. "Don't let the oil crunch catch us out in the way that the credit crunch did."

Other British executives who will support the warning include Ian Marchant, chief executive of Scottish and Southern Energy group, and Brian Souter, chief executive of transport operator Stagecoach.

Their call for urgent government action comes amid a wider debate on the issue and follows allegations by insiders at the International Energy Agency that the organisation had deliberately underplayed the threat of so-called "peak oil" to avoid panic on the stock markets ...

Guardian  08 Feb 2010

Oil

EIGHTY-FIVE million barrels. That's how much oil we consume every day. It's a staggering amount - enough to fill over 5400 Olympic swimming pools - and demand is expected to keep on rising, despite the impending supply crunch.

The International Energy Agency forecasts that by 2030 it will rise to about 105 million barrels per day with a commensurate increase in production, although whistle-blowers recently told The Guardian newspaper in London that insiders at the IEA believe the agency vastly over-estimates our chances of plugging that gap. The agency officially denies this.

Wherever the truth lies, it is widely expected that by 2030 we will have passed the peak of conventional oil production - the moment that output from conventional oil reserves goes into terminal decline.

A report from the UK Energy Research Centre published in August said there was a "significant risk" it would happen before 2020. And that means we will soon be staring down the barrel of the ultimate oil crisis.

Some governments and corporations are waking up to the idea and beginning to develop alternatives to keep the world's transport systems moving when cheap oil runs out.

These include biofuels, more energy-efficient - or electric - cars, and hydrogen. But none of these is likely to make up the global shortfall in time ...

New Scientist  02 December 2009

Crude is still being discovered; existing fields are not being exploited to the full. So it's hard to predict the exact point at which the world's dwindling reserves will precipitate a crisis. But it's coming ...

... the Paris-based IEA admits that the world still needs to find the equivalent of four new Saudi Arabias to feed increasing demand at a time when the depletion rate in old fields of the North Sea and other major producing areas is running at 7% year on year.

"The fields which are producing today are going to significantly decline. We are very worried about these trends," says Fatih Birol, the chief economist at the IEA, who has gradually ramped that depletion figure upwards and has expressed deep concerns at a huge fall-off in the current levels of investment in the sector.

Birol and the wider industry are certainly well aware that the days of "easy" oil are over. The big international companies such as BP and ExxonMobil are struggling to find enough new oil to replace their exploited reserves year-on-year and Shell found itself on the end of a major fine for exaggerating its reserves report to the Securities & Exchange Commission in the US.

The energy groups used to rely on the easily exploited shallow waters in the Gulf of Mexico, politically friendly areas of the Middle East and geologically simple reservoirs off Britain to feed their refineries and petrol stations.

But as these wells begin to run dry, Big Oil is being forced into ever more physically or politically demanding areas to bring home the crude – at much greater financial cost.

The Tiber find is just one example. There may be as many as 4bn barrels of oil in place – as much as the North Sea's Forties field – but the hydrocarbons are located in 4,100 feet of water, which makes them very expensive to extract ...

In the meantime, the oil companies have moved into all sorts of "unconventional" projects such as "gas-to-liquids" (converting natural gas into petrol and diesel) and, most controversially, the tar sands of western Canada.

These reserves offer enormous new quantities of oil but can only be extracted by mining or other methods which themselves require large amounts of energy and water.

The Athabasca sands being developed by Shell and others in Alberta are a number one hate target for Greenpeace and the new breed of socially responsible investment funds run by the Co-op and others ...

Observer  29 November 2009

The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.

The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.

The allegations raise serious questions about the accuracy of the organisation's latest World Energy Outlook on oil demand and supply to be published tomorrow – which is used by the British and many other governments to help guide their wider energy and climate change policies.

In particular they question the prediction in the last World Economic Outlook, believed to be repeated again this year, that oil production can be raised from its current level of 83m barrels a day to 105m barrels. External critics have frequently argued that this cannot be substantiated by firm evidence and say the world has already passed its peak in oil production.

Now the "peak oil" theory is gaining support at the heart of the global energy establishment. "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," said the IEA source, who was unwilling to be identified for fear of reprisals inside the industry. "The 120m figure always was nonsense but even today's number is much higher than can be justified and the IEA knows this.

"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. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources," he added ...

Guardian  09 November 2009

There is a "significant risk" that global production of conventional oil could "peak" and decline by 2020, a report has warned.

The UK Energy Research Council study says there is a general consensus that the era of cheap oil is at an end.

But it warns that most governments, including the UK's, exhibit little concern about oil depletion.

The report's authors also state that the 10 largest oil producing fields in the world are all in decline ...

... the report suggests the easy oil has already been found, and new reserves will become increasingly difficult and expensive to extract, and will not make up for the current major oil fields as they decline.

It says: "More than two-thirds of current crude oil production capacity may need to be replaced by 2030, simply to keep production constant.

"At best, this is likely to prove extremely challenging." ...

BBC NEWS  08 October 2009

BP has reopened the debate on when the "peak oil" supply will be reached by announcing a big new discovery in the Gulf of Mexico which some believe could be as large as the Forties, the biggest field ever found in the North Sea.

The strike comes days after Iran unveiled an even larger find of 8.8bn barrels of crude oil, and the moves have encouraged sceptics of theories which say that peak production has been reached, or soon will be, to hail a new golden age of exploration and supply ...

... exponents of peak oil theories said the BP find would not fundamentally change the longer-term supply-and-demand picture.

"The International Energy Agency said in its 2008 report that the world needed to find six new Saudi Arabias to meet the growing demand for oil in the future," said Jeremy Leggett, chairman of the renewable power company Solarcentury, and a key peak energy specialist.

"This [BP] find is welcome but its not going to take concerns away at a time when existing fields are depleting faster than expected and the new discoveries have a very long lead time."

Leggett pointed out that it would take many years for BP to bring any Tiber fields onstream, pointing out that the huge Kashagan find in the Caspian Sea, in which BP has sold its stake, was meant to produce its first oil in 2005 but is now targeting 2013 as a start-up date.

The oil company will be helped at Tiber by the light nature and high quality of the oil in a development that will cost billions of pounds.

The two discoveries, which are about 40 miles apart, make it much easier for BP, which owns 62% of the discovery alongside Petrobras of Brazil and ConocoPhillips of America, to justify building a platform and pipeline to shore. The companies will need to tackle very deep water – the well is one of the deepest ever drilled.

The oil has been found in lower tertiary soils which were created more than 30m years ago. Their commercial prospects will depend on what portion of the reserves at Tiber can be recovered: in the case of Forties it has risen to well over 70%, but can be as low as 30% in other parts of the industry.

Guardian  02 September 2009

In the end, perhaps the most misleading claim of the peak-oil advocates is that the earth was endowed with only 2 trillion barrels of “recoverable” oil.

Actually, the consensus among geologists is that there are some 10 trillion barrels out there. A century ago, only 10 percent of it was considered recoverable, but improvements in technology should allow us to recover some 35 percent — another 2.5 trillion barrels — in an economically viable way.

And this doesn’t even include such potential sources as tar sands, which in time we may be able to efficiently tap.

Oil remains abundant, and the price will likely come down closer to the historical level of $30 a barrel as new supplies come forward in the deep waters off West Africa and Latin America, in East Africa, and perhaps in the Bakken oil shale fields of Montana and North Dakota.

But that may not keep the Chicken Littles from convincing policymakers in Washington and elsewhere that oil, being finite, must increase in price ...

This is not to say that we shouldn’t keep looking for other cost-effective, low-pollution energy sources — why not broaden our options?

But we can’t let the false threat of disappearing oil lead the government to throw money away on harebrained renewable energy schemes or impose unnecessary and expensive conservation measures on a public already struggling through tough economic times.

Michael Lynch, the former director for Asian energy and security at the Center for International Studies at the Massachusetts Institute of Technology, is an energy consultant.

NYT  24 August 2009

... renewed hostilities may be aimed at sabotaging a referendum set for January 2011 over independence for the south.

The region's future has wider importance, for large oil reserves lie beneath its lush plains.

Those reserves are coveted by the north as a resource to sell to China, whose appetite for Sudan's oil has given Khartoum a financial and diplomatic windfall ...

If the referendum goes ahead in January 2011, as laid down in the peace agreement, few doubt the south will choose to break away and a new country will emerge in the heart of Africa.

But the south has about 75 per cent of Sudan's 6.3 billion barrels of proven oil reserves, giving the north a vital interest in preventing it from seceding.

One way would be to stir violence across the south, to the point where the situation is too unstable for the referendum to be held ...

Telegraph  15 August 2009

Sudan

The demand for oil has hit a short-term peak in the west and industry predictions of how long it will take to recover are getting longer, research from Greenpeace shows.

The Shifting Sands report pulls together oil demand forecasts from Opec and the International Energy Agency (IEA).

The report found both have cut their medium and long-term forecasts - partly due to the impact of the current recession, but also down to new government policies.

"In the longer term, the impact of two key policy instruments adopted in the US and EU are cited as gaining in influence.

These are the US Energy Independence and Security Act and the EU Climate and Energy package. These policies, and the fact that there has been a degree of saturation in these markets, have led to the unanimous conclusion among these agencies that oil demand in the OECD has peaked."

The report adds that, although demand in countries such as China and India will continue to grow, "a global peak in oil demand may be within sight".

Greenpeace says this could put at risk the tens of billions of dollars major oil companies have invested in carbon-intensive tar sands projects.

The report also contains data showing how the oil majors have become increasingly reliant on tar sands, with Shell emerging as the most heavily involved.

Guardian  28 July 2009

Greenpeace study finds oil companies may be doomed

Shifting Sands

The Oil Drum

Tar Sands

A report by Oil & Gas UK, the industry group, showed that companies are cutting back on new projects as costs rise and funding is scarce during the recession.

Investment in the industry fell to £4.8bn last year, down £1.2bn over the last two years, and it could drop below £3bn next year. The report estimates that £5bn a year is needed to maintain exploration.

Malcolm Webb, chief executive of UK Oil & Gas, said billions of barrels may never be extracted if the lack of investment causes oil and gas fields to shut prematurely.

"Last year, we had the credit crunch, next year we are looking at an energy crunch," said Mr Webb, whose organisation represents 85 oil and gas companies. "I'm still very concerned about the lack of investment."

Domestic reserves still account for about two-thirds of all the UK's primary energy needs, but reliance on foreign imports is increasing as domestic production is currently dropping by 5pc a year. Mike Tholen, economic adviser for Oil & Gas UK, said the fall was likely to accelerate to 7.5pc over the next few years.

In the worst case, the North Sea could provide just 500,000 barrels of oil equivalent per day by 2012 – or just 12pc of the UK's energy demand. If investment is maintained, domestic production could still meet 40pc of Britain's needs.

Oil producers believe it is still possible to extract 37bn barrels from the North Sea. However, declining investment means as little as 11bn barrels may be recovered before fields are decommissioned.

"Ministers say it would be regrettable if production is at the lower end of estimates. We think this is an understatement," Mr Webb said.

Oil & Gas UK has long been calling for the tax burden on the energy industry to be cut. At its current level, the sector provides £13bn – or 30pc – of all UK corporation tax receipts.

Chancellor Alistair Darling announced measures to incentivise exploration for new fields in the Budget, but oil companies have criticised the lack of tax breaks for existing fields.

Separately, Tullow Oil , the UK oil explorer, said revenues were expected to drop 23pc in the first half on reduced activity in the North Sea and the lower oil price.

Revenues at Tullow Oil are expected to fall to £290m in the first half, despite the development of African fields to offset falling UK production. Its share price tumbled 27, or 3pc, to 863½p.

Problems with Tullow's North Sea operations have seen output fall by 16pc to 59,000 barrels of oil a day compared with last year.

The price of US crude oil fell to a two-month low of $62 per barrel on Wednesday, on fears of slower than expected economic recovery.

Telegraph 08 July 2009

We must end our oil dependency, says chancellor

Last week, I summarized the new USGS report on the undiscovered oil and gas resources of the Arctic. This week, I'll share with you what I learned at the OTC 2009 conference last month about some of the challenges the industry faces in developing those resources.

Arctic drilling is not new. The first successful well was drilled in March 1968, when ARCO struck oil in the Prudhoe Bay field 250 miles north of the Arctic Circle on the North Slope of Alaska, near the Arctic Ocean. The find was the largest oil field in the U.S., with an estimated 13 billion barrels of recoverable oil (BP), twice the total reserves of the East Texas field, and a flow rate of around 400,000 barrels per day (EIA).

The discovery kicked off an exploration spree throughout the Arctic. By the mid-1970s, offshore drilling was under way as well, but offshore production in the Arctic and sub-Arctic has remained limited due to its difficulty. A mere two million barrels of oil, and no gas, have been produced from the Canadian Arctic offshore since 1985.

ConocoPhillips (NYSE: COP) is the second largest Arctic producer after Russia's Gazprom. Peter Noble, the Chief Naval Architect for ConocoPhillips, ticked off some of the main challenges to Arctic production at the OTC conference.

To begin with, the drillships used in the 70s and 80s are no more. The US hasn't built new icebreakers since the 1970s under Nixon. With a renewed interest in the Arctic, the oil and gas industry is now designing and building a new class of modern drillships and tankers for the Arctic, able to penetrate deeper waters and deeper reservoirs, and break ice continuously. These are highly specialized ships, made by manufacturers such as Finland's Wärtsilä Corporation (HEL:WRTBV).

Submersible drilling rigs can be used in the Arctic, but they can only be moved in open water season, and work best in water depths of less than 30 meters (most of the new prospects in the Arctic are in depths up to 1000 meters). Harsh environment semi-submersibles exist, but none are really capable of surviving months of being locked in ice.

Similarly, collecting 3-D seismic data in 600 to 1000 meters of water today is a much more difficult task than shooting 2-D seismic in 30 meters of water was in the 1980s.

What we need to keep going, said Noble, is drilling solutions that can operate in more than "tens of days" in the warm season. Year-round transportation is needed, instead of platforms being inaccessible to tankers for most of the year, while offshore platforms keep pumping into large and expensive storage tanks.

Energy and Capital 12 June 2009

Arctic Refuge drilling controversy

New survey of Arctic's mineral riches could stoke international strife

Arctic Oil Online

Riches in the Arctic: the new oil race

Arctic 'has 90bn barrels of oil'

Why Trash an American Treasure for a Tiny Percentage of Our Oil Needs?

When will the oil run out?

Earlier this year, I submitted a freedom of information request to the UK's department for business, asking what contingency plans the government has made for global supplies of oil peaking by 2020.

The answer was as follows: "The government does not feel the need to hold contingency plans specifically for the eventuality of crude-oil supplies peaking between now and 2020." ...

I asked [Fatih Birol, chief economist of the International Energy Agency] a question for which I didn't expect a straight answer: could he give me a precise date by which he expects conventional oil supplies to stop growing?

"In terms of non-Opec [countries outside the big oil producers' cartel]," he replied, "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."

... Birol's date, if correct, gives us about 11 years to prepare. If the Hirsch report is right, we have already missed the boat. Birol says we need a "global energy revolution" to avoid an oil crunch, including (disastrously for the environment) a massive global drive to exploit unconventional oils, such as the Canadian tar sands.

But nothing on this scale has yet happened, and Hirsch suggests that even if it began today, the necessary investments and infrastructure changes could not be made in time.

Birol told me: "I think time is not on our side here."

... the British government had better start drawing up some contingency plans.

Guardian 15 December 2008

Global oil supply will peak in 2020

Beyond laissez-faire

After the credit crunch, the oil crunch

UK will face peak oil crisis within five years

The risk to the UK from falling oil production in coming years is greater than the threat posed by terrorism, according to an industry taskforce report published today.

The report, from the Peak Oil group, warns that the problem of declining availability of oil will hit the UK earlier than generally expected - possibly within the next five years and as early as 2011.

Oil supply could then rapidly decline, or even collapse, the report warns, with potentially devastating implications for the UK economy.

The report was issued today by the recently established UK industry taskforce on peak oil and energy security, a group of eight companies including transport firms Virgin, Stagecoach and FirstGroup, engineers Arup, architects Foster and Partners, and energy giant Scottish and Southern.

Entitled The Oil Crunch, the report argues that the risk of an early peak in oil production poses a bigger threat to UK society than tightening gas supplies, terrorism or the short-term impacts of climate change.

Guardian 29 October 2008

Peak Oil Task Force

Oil Report Final.pdf

Riches in the Arctic: the new oil race

The future of the Arctic will be less white wilderness, more black gold, a new report on oil reserves in the High North has signalled this week. The first-comprehensive assessment of oil and gas resources north of the Arctic Circle, carried out by American geologists, reveals that underneath the ice, the region may contain as much as a fifth of the world's undiscovered yet recoverable oil and natural gas reserves. This includes 90 billion barrels of oil, enough to supply the world for three years at current consumption rates, or to supply America for 12, and 1,670 trillion cubic feet (tcf) of gas, which is equal to about a third of the world's known gas reserves ...

Independent 25 July 2008    The next colonial scramble

Merely fuelling our addiction

Today's decision to delay the expected fuel duty escalator will, contrary to popular expectation, make things worse for motorists, not better. Although there might be some reduction in the immediate pain felt by fast-rising fuel costs, in the medium and longer term, perpetuating our society's addiction to oil can only lead to ever greater vulnerability and worse shocks in future. The decision to shelve the fuel duty increase is in the same mindset that comes with our prime minister's repeated calls on Opec to pump more oil: both are disastrously short-term. Taking a slighter longer view reveals two very good reasons to send a strong above-inflation price signal to encourage a rapid departure from the age of oil. ...

Guardian 16 July 2008    Oil revenues expected to bail out government

Canada's dirty secret

As oil prices continue to reach record highs, the search for new sources of energy has led the world to Alberta, Canada, and its vast oil sands. Now, John Vidal finds, the country famed for its wilderness and clean living finds itself caught between fuelling the world's oil-hungry economy and the ecological devastation and soaring greenhouse gas emissions that exploiting the tar sands produces ... The downside is ecological devastation and soaring greenhouse gas emissions on a scale that is beginning to alarm Canadians and other western countries trying to reduce the intensity of their carbon economies to counter climate change. Canada, alone, of developed countries, is expecting to increase emissions for 30 years and ignore its commitments to Kyoto.

So far, nearly 180 sq miles (470 sq km) of forest have been felled by tar sands miners and giant lakes of toxic waste water cover a further 130 sq km. Environmental campaigners, first nation groups, and doctors accuse the companies of creating massive air pollution, threatening river ecologies and killing fish, and even causing human cancers.

"This is the dirtiest source of oil anywhere in the world and there are barely any regulations," says Simon Dyer, a researcher for the University of Alberta's Pembina Institute.

He says the greater energy needed to produce a barrel of oil from the sands means three times more greenhouse gas emissions than producing a barrel of conventional oil. The greater energy is needed because the oil has to be dug out and then separated from the sand, and because it is low grade it has to be heavily refined.

Guardian  11 July 2008   More

Chancellor Alistair Darling today warned that the UK must become less dependent on oil by replacing nuclear power stations and investing in renewable energy, as he described the soaring cost of crude as a "huge threat" to the economy. ...

... Darling said high oil prices are feeding inflationary pressures in Britain and around the world, and called for a rise in production as well as a raft of measures to lessen Britain's dependence on oil.

"If we we don't reduce our dependence on oil ... we will continue to expose ourselves to the uncertainty of the oil market," Darling said. "It is important that we reduce our dependency far more quickly than perhaps people thought was necessary."

The chancellor called on consumers to make their homes more energy efficient, for example through better insulation. But as well as paying more attention to renewable energy sources, he warned that it was important for the UK to "replace our nuclear power stations as quickly as we can". ...

Guardian 03 July 2008

Oil crisis triggers fevered scramble for the world's seabed

A fevered scramble for control of the world's seabed is going on - mostly in secret - at a little known office of the United Nations in New York.

Bemused officials are watching with a mixture of awe and suspicion as Britain and France stake out legal claims to oil and mineral wealth as far as 350 nautical miles around each of their scattered islands across the Atlantic, Pacific, and Indian oceans. It takes chutzpah. Not to be left out, Australia and New Zealand are carving up the Antarctic seas.

The latest bombshell to land on the desks of UN's Commission on the Limits of the Continental Shelf is a stack of confidential documents from the British Government requesting an extension of UK territorial waters around Ascension Island, St Helena and Tristan da Cunha ...

Telegraph 30 May 2008    Oil Prices

We have gone mad ...

In common with the leaders of most western nations, our prime minister is urging you to increase your production of oil. I am writing to ask you to ignore him. Like the other leaders he is delusional, and is no longer competent to make his own decisions.

... your restrictions on supply - voluntary or otherwise - are helping the government to meet its carbon targets. So how does it respond? By angrily demanding that you remove them so that we can keep driving and flying as much as we did before.

Last week, Gordon Brown averred that it's "a scandal that 40% of the oil is controlled by Opec, that their decisions can restrict the supply of oil to the rest of the world, and that at a time when oil is desperately needed, and supply needs to expand, that Opec can withhold supply from the market".

In the United States, legislators have gone further: the House of Representatives has voted to bring a lawsuit against Opec's member states, and Democratic senators are trying to block arms sales to your kingdom unless you raise production.

This illustrates one of our leaders' delusions. They claim to wish to restrict the demand for fossil fuels, in order to address both climate change and energy security. At the same time, to quote Britain's Department for Business, they seek to "maximise economic recovery" from their remaining oil, gas and coal reserves.

They persist in believing that both policies can be pursued at once ...

Guardian 27 May 2008         

Peak oil, anybody?

Oil's perfect storm may blow over

Is the world about to be running on empty?

Canada's Tar Sands

Cutler Cleveland

Dick Cheney on Peak Oil

Encircling the Peak of World Oil Production - Richard C. Duncan and Walter Youngquist

Energy: Resources - Consumption - Politics

Hubbert Peak

In Memoriam – L.F. (“Buzz”) Ivanhoe

Kenneth S. Deffeyes

Les Magoon: Are We Running out of Oil?

Oil Depletion Analysis

Our only hope lies in forging a new energy world order

Swenson's Law

World oil supplies are set to run out faster than expected