Posted: Tue Jul 01, 2008 3:08 pm Post subject: WSJ columist: IEA moves towards Peakers camp
Quote:
July 1, 2008, 2:56 pm
Peak Oil: IEA Inches Toward the Pessimists’ Camp
Posted by Keith Johnson
What’s up with oil prices? Well, it’s not speculators, and there’s no relief in sight, meaning at least five more years of high prices with no easy fixes. The ugly truth? Peak oil isn’t fringe anymore—it’s going mainstream.
That’s the reading from the latest oil market report from the International Energy Agency, the rich-country energy watchdog. The IEA’s latest x-ray of the oil market includes plenty of disturbing nuggets.
The fact that there are no growing stockpiles of crude around the world, for example, suggests speculators aren’t behind crude’s dizzying rise this year (much to Paul Krugman’s satisfaction and Congress’ chagrin.)
And while U.S. drivers fret and worry over how to pay for the Prius, the sad truth is that it doesn’t matter: By 2015, developing country oil demand will outstrip the rich world’s. They’re already in the driver’s seat: 90% of the demand growth over the next five years will come from Asia, the Middle East, and Latin America, the IEA said.
But the juiciest nugget? The conservative IEA appears to be inching ever-closer to the “peak-oil” crowd. Supply simply can’t keep pace with demand—everybody with an oil well has the taps open, but there’s not much left in the keg. Oil fields are aging quicker than free-agent pitchers, and the global oil industry has to run faster just to stay in place. From the IEA:
Project delays averaging 12 months, coupled with global average decline of 5.2% - up from 4% last year – are the factors behind these revisions. Over 3.5 mb/d of new production will be needed each year just to hold global production steady. “Our findings highlight again the need for sustained, and indeed, increased investment both upstream and downstream — to assure that the market is adequately supplied,” stated [IEA Executive Director Nabuo] Tanaka.
So where’s that fresh supply going to come from? As the IEA noted, Saudi Arabia is the only country with a glimmer of spare production capacity—and the jury is still out on that. Increased domestic drilling, the U.S. energy agency already said, would be but a hiccup in the global market. Non-OPEC countries, from Norway to Mexico, are expected to chip in just 1.2 million barrels per day of new crude by 2013, IEA head of market analysis Lawrence Eagle said—or less than half the global shortfall.
Politicians can pick their bogeyman—be it speculators, OPEC, or Democrats. But more and more it seems like the oil connundrum boils down to an age-old truth: Finite supplies can’t meet infinite demands.
Joined: May 19, 2005 Posts: 797 Location: Merry Ol' USA
Posted: Tue Jul 01, 2008 3:13 pm Post subject: Re: WSJ columist: IEA moves towards Peakers camp
The best part of the story, under the "comments" section:
Quote:
I used to think that Peak Oil was the theory of the “quacks”. But the joke may be on us. I am begining to wonder if there is some validity to this Peak Oil theory.
Comment by Frank Sims - July 1, 2008 at 4:48 pm
_________________ After fueling up their cars, Twyman says they bowed their heads and asked God for cheaper gas.There was no immediate answer, but he says other motorists joined in and the service station owner didn't run them off.
Joined: Feb 20, 2005 Posts: 2788 Location: Uppsala, Sweden
Posted: Tue Jul 01, 2008 5:54 pm Post subject: Re: WSJ columist: IEA moves towards Peakers camp
Quote:
I have been told by a reliable source that the IEA has been forbidden by the US administration from updating their absurdly cornucopian oil supply and demand scenarios until the report that comes out late this year (after the election); that report, which will publish the result of a "bottom-up" analysis (ie a summary of all existing oil fields, their production and/or prospects) is epxected to show that oil production is unlikely to reach the levels that so many have blithely assumed - notably on the basis of previous optimstic IEA reports. The IEA, which was deemply unhappy about the current lies to was supposed to present and support, has been leaking word of the expected content of that new report for many weeks now, including an increasingly alarmist tone in its official reports, such as today's Medium Term Market Outlook:
The IEA said it believed Saudi Arabia was having bigger problems than the kingdom, the world's largest exporter, was willing to admit to, despite its national oil company having gone to great lengths last month to reassure energy ministers gathered in Jeddah that, except for Khursaniyah, its capacity editions were running on schedule.
And now I feel far less sure about Saudi Arabia than I did 5 minutes ago!
I have on many occasions said that it is my belief that PO will really break thorugh media-wise after the IEA Energy Outlook is published in November (with the bottom-up study!). Suddenly I get the feeling we mightn't need wait that long. _________________ Peak oil is not an energy crisis. It is a liquid fuel crisis.
Joined: Jun 18, 2005 Posts: 3909 Location: In a van down by the river
Posted: Tue Jul 01, 2008 6:21 pm Post subject: Re: WSJ columist: IEA moves towards Peakers camp
jdmartin wrote:
The best part of the story, under the "comments" section:
Quote:
I used to think that Peak Oil was the theory of the “quacks”. But the joke may be on us. I am begining to wonder if there is some validity to this Peak Oil theory.
Comment by Frank Sims - July 1, 2008 at 4:48 pm
Back when I first started on PO.com I was definitely in that camp, I thought everyone here was nuts and Po was a just some quack theory. I have since become convinced that PO is most likely upon us now and I am certain that everyone here is nuts.
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