BP came out with their review of world energy paper today and as usual I was very interested in what they had to say.
BP Statistical Review of World Energy 2013
There are many interesting aspects of the report that could bear long discussion, although more than likely on an energy blog like the oildrum and not here but a few little tidbits did leap out at me.
World oil consumption actually rose again this time by 290K barrels a day while last time I checked US consumption is still going down although not as fast as it had been I think. This is not necessarily a good thing if overall energy consumption of all types for the US is going down as well. Yet this is not the part that really peaked (pun haha) my interest as much as the increase in global oil production which the report is showing as being 1.9 Million barrels per day.
The report goes on to hype the shale oil production as well as increased Mid East production as the reason for this overall increase and many will herald this as a good sign that globally we are not suffering from an energy crisis and peak oil is a farce. My only real problem with this is that with such high production that exceeds increases in demand why are oil and gasoline prices continuing to rise?
I believe the answer lies in the energy return of shale oil production and just like the easy oil we got back in the early years the returns on shale oil just "ain't gonna get any better". Another words we have officially averaged in the high dollar Shale oil into the mix and into the end user price tag.
We are sliding further down the hockey stick than anyone realizes as crude prices once again slip back up towards the $100.00 a barrel cost. Even with increased production over and above consumption levels the price refuses to drop because there are no profits for oil at those levels. This means even with a surplus at the first stage of production we are already feeling the effects of peak oil overall.
The next question is how long will they be able to squeeze $100.00 a barrel oil out of the rocks and how long will $100.00 actually be worth $100.00?
If Shale oil production drops as fast and as suddenly as some have predicted the slow slide of peak oil could have a dramatic bump for us in the near future.
You may want to plan accordingly.
Keep Prepping Everyone!!!
Part of the problem is that oil that is coming from some fields needs more refining that oil from newer fields. More refining means higher cost. I think we need restrictions, aka rationing, of oil use and other items.
ReplyDeletePP - I see no problem with rationing but I do have my doubts that rationing today would be prioritized like it was the other times it was done. I think rationing might bring with it overly high food prices and maybe even shortages if it was done by the current regime.
DeleteThen again officially they are saying we have a global surplus which means they can't ration unless they tell the truth.
It's the constant effort to set up peak oil as a strawman by saying it is equivalent to no oil, when in the near term, what you are really going to get is expensive oil.
ReplyDeleteRuss - Exactly.
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