Petrol price bugging ya?

[disturbed]

i remember watching a doco on discovery last year about oil sand above canda. they rekon theres enough to supply the worlds demand for a long time to come and its a better quality oil. its just that the refining etc isnt as economic as drilling oil yet since it hasnt been around as long

[rainman]

Still plenty of oil to be found yet:

http://news.bbc.co.uk/2/hi/business/4563896.stm

700 million barrels.... so 8 and a bit days world consumption. And it's somewhat heavier than we like. And under 1.5km of water, then another 2kms of salt. And will take a few years to develop. Sure to be a cheap solution to all of our problems then!

i remember watching a doco on discovery last year about oil sand above canda. they rekon theres enough to supply the worlds demand for a long time to come and its a better quality oil. its just that the refining etc isnt as economic as drilling oil yet since it hasnt been around as long

True, there's a metric buttload of tar sands in Canada. Problem is the optimistic forecasts only have them delivering about 3 million barrels per day, and then at some not insignificant environmental cost. The process involves a lot of water, I understand, and much of it doesn't end up too clean afterwards. Plus there's quite a bit of digging and natural gas use, so again, not a cheap solution.

No-one likes bad news, but there aren't a lot of (any?) cheap options for oil left. This is even being recognised by many of the oil co's and bodies like the EIA. Sure, there will be more discoveries, but still the total volume discovered has been reducing since the 60's. Sure there will be better technologies used to extract it, but still consumption goes up. (Including local consumption, meaning lower exports for producers as their economies become more oil-intensive). This is just the market at work, folks - no-one ever said it had to be cheap forever...


... it's just that there are potentially quite a few adverse effects of having an unconstrained market outcome for a commodity as vital as oil.

But hey, don't take my word for it. Dr Fatih Birol is the Chief Economist and Head of the Economic Analysis Division of the IEA (International Energy Agency) - not an enviro-wackjob.

From now to 2015, the market and the oil industry will be severely tested. In the next five to ten years, oil production from non-OPEC producers will reach a peak before starting to decline, for lack of sufficient reserves. As each day passes, new evidence of this fact appears. At the same time the peak of the economic expansion phase of China will take place. The two events will coincide: the explosion of the growth of the Chinese demand, and the fall in production of non-OPEC oil. Will our oil system be it able to answer this challenge, that is the question.
...
We may see very high prices that will come to a level where the wheels may fall off
...
We are not on the correct path. World oil consumption is growing ever more quickly.
...
Unfortunately, there are many words, but few acts. I really hope that the consuming nations will understand the gravity of the situation, and will set up very strong and radical policies to slow down the growth of the demand for oil.

Or ConocoPhillips' CEO:

ConocoPhillips (COP) Chief Executive James Mulva had earlier told a New York financial conference that he doubted that world oil producers would be able to meet forecast long-term energy demand growth. The International Energy Agency, the energy watchdog for western economies, has projected 2030 world oil demand of 116 million barrels a day. But Mulva said he doesn't believe oil supply will ever exceed 100 million barrels a day. He didn't offer a price forecast.

"Demand will be going up, but it will be constrained by supply," Mulva said. " I don't think we are going to see the supply going over 100 million barrels a day and the reason is: Where is all that going to come from?"

Or Total's CEO, talking about future forecasts of 100m barrels per day usage:

100m barrels per day is now in my view an optimistic case… It is not my view: it is the industry view, or the view of those who like to speak clearly, honestly, and not just try to please people….We have been, all of us, too optimistic about the geology. Not in terms of reserves, but in terms of how to develop those reserves: how much time it takes, how much realistically do you need.” - Christophe de Margerie, CEO

Hold on, it's going to be a bumpy ride!