According to geologist Dale Alen Pfeiffer
(1) who has been following the Peak Oil Threat (a cocern some scientists have that
the world running out of cheap Oil (2)) there are reasons to be a bit optimistic: prices will fluctuate due to the war, but reserves will hold for a couple of years
it appears that we may have reached an energy breather. Soft prices will be welcomed most graciously by those in denial of peak oil. Yet this will also give those of us who are aware a chance to prepare - perhaps our last chance..
A respite until 2007 ?
Funny how now it turns out that 2007 may be the "beggining of the end" of oil. If you have been following my diaries you will remeber that I worry that Bush & Co. shameless behavior may mean they know something we don't. It's like
They just don't care anymore, like an asteroid is about to his us, and those who know about it don't really care about anything anymore
(3)
And don't forget your tin foil hat! Remember, Mayans thought their civilization would end in 2012 with the initial "shake up" starting in... 2007 (4)
2005 Energy Picture
... oil prices might drop back below $20/barrel before 2005 is over - depending on circumstances. Several new large fields should come online this year, adding extra capacity.
These are the last of the 500 million barrel mega fields, since none has been discovered in the past few years. Eighteen new mega projects are due to start producing this year, followed by eleven more is 2006. However, 2007 will see the opening of only three new projects, followed by three more in 2008. This will not keep up with declining production in older fields, much less the increase in demand.
ODAC has announced that world production is now seeing a 1 million barrel/day depletion rate. It remains to be seen whether the new production slated to come online this year and next will be sufficient to make up for that depletion rate. And should Ghawar collapse within the next year or two, the loss of production from this one field might cancel out all gains from new fields.
Increasing demand in China and India might also keep prices strong. Both countries are building strategic petroleum reserves. The additional demand of filling these reserves could account for all new production this year, driving prices higher. However, if prices climb high enough, these countries will likely suspend purchases for their strategic reserves, and might even open their reserves to help bring the price back down.
So for the next two years prices will tend to be soft, though they will remain volatile due to production disruptions caused by natural catastrophe, warfare and a host of other causes. In other words, we may have a cushion for the next couple years. But how are we going to use it? If we provoke supply disruptions, the price will bounce up. Once the disruption is over, prices will drop.
Likewise, our natural gas storage is full going into winter 2005. We will have no gas shortages this year, barring a major natural catastrophe. Though how long we can expect the weather to cooperate is a good question (which perhaps should be asked of those who are laying the ceiling of vapor trails in our skies). However, production is still precarious, and it is doubtful that any new production from territories recently opened to drilling will have much effect beyond broadening out the North American natural gas cliff.
So it appears that we may have reached an energy breather. Soft prices will be welcomed most graciously by those in denial of peak oil. Yet this will also give those of us who are aware a chance to prepare - perhaps our last chance before the roller coaster dives down the declining slope of production, carrying all in it
(1) - http://www.energybulletin.net/3792.html
(2) - http://lawnorder.dailykos.com/story/2004/8/15/21528/5653
(3) - http://lawnorder.dailykos.com/story/2004/11/30/22656/124
(4) - http://lawnorder.dailykos.com/story/2005/2/3/1829/60776
See also:
Daily Kos :: Anything Into Oil: From Turkey to Crude Oil
Daily Kos :: While We'll Never Run Out Of Oil, we will run out of cheap oil
Daily Kos :: So what happens when Oil runs out ? North Korea's story