Peak oil is starting to rear its ugly head

[BengaBenga]

NJ5 said:

BengaBenga said:
At the current moment the demand is equal to a year ago. The market price very muchs steers the demand.
The current price is way too high, but that's mainly due to investment funds trying to make money out of oil. Imo commodities shouldn't have interference from money-hungry financial people.

Peak-oil is a myth by the way. It's true that the EASY OIL is mostly gone, but that doesn't mean these recources are depleted. There is still a lot of production from enormous oil fields in Saudi, Gulf of Mexico, North Sea, Iran etc.
Once Iraq and Nigeria stabilize production can be upped even further.
Problems are not to be expected for the next 20 years or so. Saudi alone can provide the world for about 10 years with oil, and they haven't even looked much beyond their know petroleum system.

And there's still a lot of exploration for new hydrocarbons. Thee Canadian tar-sands, deep-sea, the arctic. There are still a lot of regions where we haven't even really started because of the big investments needed, but where the high oil price allows for investments now.
Just in the last 3 months two enormous oil fields were discoverd off-shore Brasil.
Alaska should become the next Gulf of Mexico for the US within a few years.

That being said: it's very important to increase the usage of alternative sources of energy. Partly to release the pressure from the oil producers, that constantly have to max their production and to account for growing demand. But most importantly to spare the environment. CO2 reduction is of imminent importance.
Also it makes very little sense to use oil as a fuel, where it is simply burned, while it's such an important chemical component in all artificial created materials, like plastics.

I wish it were that simple, unfortunately I don't think it is.

Trading and speculation are certainly increasing the prices a bit, but it can't be enough to explain the massive price increases we're seeing... The very fact that speculators can increase the price shows that supply isn't strong in the first place.

"Peak oil is a myth" you said. Now that's just plain wrong. Peak oil is the very opposite of a myth, it's a mathematically proven fact. When you have a finite resource being consumed, at some point production will have to peak. The only relatively open question is when that peak will occur.

Regarding exploration, yes there are a lot of ongoing projects and discoveries, unfortunately they don't seem to be enough to counter the depletion in existing oil fields. Exploration of those new fields is not only labor-intensive, but also energy-intensive which makes the actual retrievable amount of oil lower than it would seem by looking at the fields' sizes. The Canadian tar sands are a very dirty business, the amount of fresh water required to mine those sands is disgusting in terms of environmental impact.

@Sri Lumpa: Indeed, inflation also worries me a lot.

@Everyone else: Sorry if I missed something important to reply to, I'll look here later again :)

 

According to everyone in the oil industry (Both the comanies and the countries) the oil price is no good representation of the demand/supply market. Hence the refusal of the OPEC countries to increase production.

Sorry for the myth thing. I forgot to add that it's a myth that we've reached Peak Oil already. That's what the Peak Oil organisation says. Of course there is something as peak oil, just not now.
Only one year ago Saudi Arabia DOUBLED it's reserves to a massive 400 billion bboe.
There are a number of massive projects that are about to go on stream (Kashagan and Sakhalin for example). It's impossible to prove that we've reached peak production when the OPEC countries aren't even producing at their maximum.
Current techniques also allow for higher recovery factors and even the reproducing of depleted fields, which will also allow for production bossts.

Of course exploration and production is very expensive, but you're wrong to think that the amount of energy that's put into that is very poor in relation to what you produce. Once the infrastructure is in place a typical field can produce for over 20 years. The amount of energy produced is much higher than what's put into the building of the framework.

I can tell you that everything that's done in the oil-business is examined very closely by environmentalist and governments, so be sure that oil-companies do absolutely everything to operate as "green" as possible. Sure the mining of tar sands is very intensive, both energy and environmental, but a lot of money is used to make sure the environmental impact is as small as possible.