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Obviously with oil resources becoming geologically more difficult and financially more costly to extract the level of exploration and production has a significant impact on future oil supplies. With major oil companies decreasing their capital expenditure budgets (and the little guys having trouble even getting credit so that they can drill) the future of oil supplies does not look good - especially if there is a rebound in global economies.

The excerpt below is from ASPO-USA's year end "best of" article series, and well articulates this issue. If you want to read more about oil supplies with those who are hard-core into it (no recommendation from ELA staff here - just another data source) try visiting the Oil Drum.



As the International Energy Agency has been warning for years, a slump in upstream oil investment now means an oil supply squeeze later; the only question is when and how bad it will be. IEA Director Nobuo Tanaka warned in November that “Sustained investment is needed mainly to combat the decline in output at existing fields, which will drop by almost 2/3 by 2030.” Tanaka added that global upstream spending was budgeted to drop $90 billion, or 19%, during 2009 vs. 2008—the first decline in a decade. While some of those declines are offset by lower costs for exploration and production work, the remaining deferred investment means less oil five to ten years out.

The super-major investor-owned oil companies report that they will maintain the bulk of their planned capital expenditures going forward. Total SA plans to keeps its capital investment budget at $18 billion, Chevron will trim theirs 5% from 2009 to $21.6 billion in 2010, while ConocoPhillips will cut their capital budget by 10% to $11.2 billion. It is the smaller companies, those that are more reliant on credit to finance drilling and other field operations that are already in more of a bind. Additionally, a large number of OPEC projects have been delayed.

The investment slowdown has already impacted Canada. During 2009, the nation’s production declined slightly for a second year in a row, despite their enormous tar sands resource. But building tar sands facilities costs more than any other commercial liquid fuel operation, so those investments were the first to be delayed and cancelled. In fact, when oil dropped below $40 a barrel, some tar sands operators shut down their operations, since at that price their costs exceeded revenues.

What few analysts mention is that the impacts of this “above ground” investment slowdown will combine with the geologic limits that are impacting an increasing number of countries worldwide.

Labels: oil supply, oil supply/demand, peak oil

As oil rises for the third week in a row, and gasoline prices jump against historical trends, have we established a new floor for oil prices?

Industry and economic analysts predict that $70 a barrel is the new "bargain price" on oil. Lower than that, and oil producers can't fund exploration and development. Oil companies slash dividends. Taxes from governments and exploration constrictions raise new project costs. Oil wells are capped. Economically, the $20 a barrel price of oil, which reigned in the 1990s, is a thing of the past.

Adding to the new floor is the need to replace declining production in established oil fields. 3.5 million barrels a day of new production is needed annually to offset the loss in production from old fields.

For more on this story in The New York Times, click here.

Labels: oil companies, oil price, oil supply, oil supply/demand, peak oil

Labels: energy sources, oil price, oil supply, oil supply/demand, peak oil, renewables

Labels: automakers, efficiency, energy sources, oil supply

Labels: economy, oil companies, oil price, oil supply, oil supply/demand

Labels: economy, oil companies, oil price, oil supply, oil supply/demand

The storms racing into United States territory have not raised oil prices, despite affecting Gulf of Mexico oil operations. Gulf productions account for a quarter of all domestic oil production.

Supplies of oil remain high, while demand is low, which has kept prices down. US inventory is 20 percent above levels last year.

For more data, click here.

Labels: oil companies, oil price, oil supply, oil supply/demand

Labels: economy, oil price, oil supply, oil supply/demand

Bloomberg - At the conclusion of the most recent Organization of Petroleum Exporting Countries (OPEC) summit in Vienna, OPEC ministers decide to leave production quotas unchanged, as optimism rises over expectations of recovering demand.

Saudi Arabian Oil Minister Ali al-Naimi stated that“prices are good, the market is in good shape,” and that this fact lead the group not to alter its target outputs.

Mike Wittner, head of oil market research at Societe Generale SA in London, felt the most significant development of the conference was the forecast of demand recovery, occuring currently, in the Middle East, Asia and Latin America.

The OPEC decision precedes the U.S. Energy Department's release on oil data today. General trends point towards declining oil stockpiles, which indicate growing demand.

To read the full article, click here.

Labels: economy, oil price, oil supply, oil supply/demand

Demand for oil has fallen to 2004 levels, according to Energy Information Administration (EIA)numbers. The EIA has revised down in its demand predictions for the U.S. in 2009, as well as its output numbers from OPEC.

While numbers might be falling, China appears on the EIA's radar with growing demand forecasted, even for the economic downturn of 2009. Based upon China's recent purchases, oil rose above $60 a barrel - a six month high - in the markets on Tuesday.

To read a full analysis in The Wall Street Journal, click here.

Labels: economy, energy, oil price, oil supply, oil supply/demand

Bloomberg - An April survey of 382 U.S. financial executives in the oil and gas business reveals only 16 percent believe that by 2030 the U.S. will be able to depend solely on its own energy supplies.

The survey, run by KPMG LLP’s Global Energy Institute, also revealed that a majority believed the U.S. will not be able to mass-produce viable alternative energy until 2015.

“The executives’ perceptions of energy independence mirror their views on the viability of alternatives in the near-term,” Bill Kemble, executive director of the institute, said in a statement.

While these statements may reflect industry bias, they also appear to reflect reality. Net imports of petroleum into the U.S. were about 57 percent of the total consumed last year. If the U.S. remains on projected oil consumption levels, that percentage will only fall to about 40 percent by 2030, according to the U.S. Energy Information Administration.

To read the full article, click here.

Labels: oil companies, oil supply, renewables

The New York Times is forecasting that investors are laying the groundwork for a dramatic upsurge in the energy and commodities markets, in spite of signs suggesting the overall economy is still deteriorating.

While demand is down, many oil analysts predict that the oil price has bottomed out.

The data "suggest the market balance between supply and demand is tighter than it was a year ago when we were trading $110 a barrel," Citigroup energy analyst Tim Evans said. "Over the longer cycle, I don't like to bet against OPEC."

To read the full article, click here.

Labels: oil price, oil prices, oil supply, oil supply/demand

The New York Times is reporting today that debates over upholding the lift on offshore drilling have reignited.

As the Obama administration outlines its energy plans, it is caught between oil companies, who are reminding the president of his campaign pledge to allow some drilling offshore, and environmental groups, who are demanding a reinstatement of the drilling ban that Congress lifted in September.

Obama's administration has demonstrated both stances towards the issue. Since taking office, it has scrapped Bush administration rulings that would have opened up vast new areas for offshore drilling well into the next decade. Conversely, the administration allowed the Interior Department today to move forward with a long-planned auction of leases in the Gulf of Mexico that includes 4.2 million acres that had been off limits since 1988.

With America importing 60% of its daily needs, the discussion will ultimately center around the role of domestic supplies in the energy economy.

To read the full article in The New York Times, click here.

Labels: oil price, oil supply, u.s. energy policy

The Obama administration has broken from the offshore drilling plan proposed by the Bush administration, which would have opened additional offshore U.S. leases to oil and gas companies.

Secretary of the Interior Ken Salazar ordered an extended six-month hearing for the plan, which would have immediately opened 5-year leases.

Instead, Salazar wants"to build a framework for offshore renewable energy development so that we can incorporate the great potential for wind, wave and ocean current energy into our offshore energy strategy," Salazar said.

To read the full press release, click here.

Labels: oil companies, oil supply, u.s. energy policy

Both the U.S. and Chinese governments are expanding efforts to stockpile oil while low prices persist in the markets. The U.S. Department of Energy announced Friday, January 2, that the U.S. would aim to fill its Strategic Petroleum Reserve to capacity this year.

According to the Wall Street Journal, the Chinese are not far behind. China recently completed a four-base strategic reserve complex, and plans to add 102 million barrels of oil during its first acquisition phase. When nonstate oil distributors and refiners are added into the picture, China may boast a total of a billion gallons of idle storage capacity.

While U.S. acquisitions are not expected to have a drastic impact on oil prices, industry experts are watching Chinese purchases carefully.

To read the full article in the Wall Street Journal, click here.

Labels: oil price, oil supply, oil supply/demand

December 17, 2008 - Effective January 1, 2009, OPEC producers have agreed to slash oil production by 2.2 million barrels. While the move was expected to boost oil futures, the price of oil remains below $40 a barrel. Some doubt remains in the markets about whether OPEC members will adhere to such strict cuts.

When questioned about the cuts, OPEC cited the need to preserve oil prices so as to maintain medium- and long-term energy supply goals and investments.

The 2.2 million barrel per day production cut represents the largest cut in OPEC history. OPEC controls roughly 40 percent of the world's oil.

To read the full synopsis from the Wall Street Journal, click here.

Labels: oil price, oil supply, oil supply/demand

December 10, 2008 - On the economic markets, oil rose to $44.72 amid speculation that Russia would collaborate with OPEC in issuing oil production cuts. According to Bloomberg, OPEC and Russia are preparing to launch “significant” production cuts. Russia is the world’s second-largest exporter after Saudi Arabia.

OPEC meets December 17 in Algeria, and is expected to substantially cut oil output. Oil has lost 30 percent since the supply cuts issued in October. Production could be cut by as much as 2.5 million barrels per day.

While the success of production cut strategies hinge largely on market recovery, some analysts estimate that OPEC would like to see oil reach $100 a barrel soon.

To read the full article, click here.

Labels: oil prices, oil supply, oil supply/demand

November 12, 2008

The International Energy Agency (IEA) released its 2008 World Energy Report. The Report stressed that world energy systems face a crossroads, and must combat patently unsustainable behaviors. Despite the recent economic downturns which have lessened demand on oil, the Report states that "Oil is the world’s vital source of energy and will remain so for many years to come, even under the most optimistic of assumptions about the pace of development
and deployment of alternative technology."

Given the world's reliance on oil, the IEA calls for radical and coordinated policy action from national and international authorities in order to both decarbonize energy sources while speeding up the transition to alternative energy forms. The IEA promoted increasing financial incentives and regulatory frameworks, and removing existing conventional energy subsidies, as viable policy paths. The Report stresses that any policy choice must support both energy-security andclimate-policy goals in an integrated way.

While the IEA holds that world oil has yet to reach a peak, the fact that oil field declines are accelerating should prompt government actors, despite the fall in oil prices, to continue aggressively investing in alternative energy paths.

To read the IEA World Energy Report, and access other IEA materials, click here.

Labels: energy policy, environment, oil price, oil supply

On June 27, Neil King Jr. of the Wall Street Journal posted an article opening a window into Saudi oil supply discussions. We've published the text of that article here for you.

"Global Oil-Supply WorriesFuel Debate in Saudi ArabiaFormer Officials at OddsOver 'Peak' Theory;Crude Hits High" By NEIL KING JR. June 27, 2008; Page A1

Sadad al-Husseini and Nansen Saleri raced up the ranks at Saudi Aramco, the world's most powerful oil company, working together for years to squeezemore crude from Saudi Arabia's massive fields. Today, the two men havestaked out opposite sides of a momentous industry debate.[Sadad al-Husseini]

Mr. Husseini, Aramco's second-in-command until 2004, says the world faces a brute reality of depleting resources and ever rising prices. Mr. Saleri, until recently the company's oil-reservoir manager, insists that with enough ingenuity and investment, plenty more oil can be found. With oil prices having doubled over the past year, political leaders, Wall Street investors, commuters, airlines and car makers are all scrambling todivine where prices will head next. The disparity of opinion between two ofthe most knowledgeable men in the industry shows how much fog hangs over the most basic question of all -- whether oil can be unearthed any faster than it currently is.

At the moment, Mr. Husseini's pessimistic view is clearly ascendant. Even before this year's surge in oil prices, there were gloomy industry predictions that world oil output would soon hit a ceiling. U.S. benchmark crude hit a record high on Thursday, propelled by Libyan threats of possible supply cuts, closing at $139.64 a barrel, up more than threefold since 2004.

But Mr. Saleri isn't alone in dismissing the gloom as misplaced. Optimists, from Exxon Mobil Corp. to the U.S. Energy Department, argue that high prices propel companies to innovate and invest more. As supplies rebound, prices will fall from today's levels. Saudi Arabia itself, producer of 12% of the world's oil, has vacillated for years over whether to try to extract oil faster than it already is. Last weekend, urged on by Saudi King Abdullah, it appeared to move into Mr. Saleri's camp. Fearful that supply jitters were damaging the world economy,the kingdom said it was ready to invest tens of billions of dollars to boostits capacity to unprecedented levels -- to 15 million barrels a day over the next decade, from just over 11 million now. Opinions within the region on the health of the Persian Gulf's remaining petroleum riches vary more widely than many realize. Messrs. Husseini and Saleri disagree over whether the new Saudi production target iseither feasible or wise -- echoing a debate that has swirled behind thescenes at Aramco for years. That the two men worked side by side at the company that controls one-quarter of the world's proven oil reserves makes their divergent outlooks all the more striking.

Mr. Husseini, now an independent consultant, has jetted around the worldspreading his views, including recently over dinner with George Soros and a clutch of other top financiers. Mr. Saleri has lectured, written opinionpieces and buttonholed top oil officials from Latin America to Kuwait. Mr. Husseini, 61 years old, lives across the street from the Saudi oil minister, Ali Naimi, in a leafy neighborhood of Dhahran, the Aramco company town on Saudi Arabia's east coast. The suave but sharply opinionated petroleum geologist says most of the big oil repositories have been found, and no amount of gadgetry will restore bubbly youth to aging fields fromI ndonesia to the Gulf of Mexico. War, politics and soaring costs, he adds, are slowing development in many of the most promising regions."The fact is, we have to work harder and harder to get the oil we need," he says. Those who contend otherwise, he insists, "claim to have some magic potion, like voodoo, that doesn't exist."

Mr. Saleri, who is a year younger, shrugs off his former boss's pessimism. A self-described "technology nut" who resigned as Aramco's top reservoir manager last fall to set up his own consulting shop in Houston, Mr. Saleri has become a vociferous opponent of the "peak oil"view, which holds that global oil production is about to enter a permanent slump due to shrinking resources and limited investment."We have consumed only one trillion of the 14 or 15 trillion barrels of oilthat are out there," says Mr. Saleri, citing a personal estimate for all types of oil that is far higher than most. "For the next 40, 50 or 60 years, I see no problem at all."

Both men started their careers at Aramco as outsiders. Mr. Husseini's family moved to Saudi Arabia from Syria in 1961, when he was 14. The royal family had invited his father to help establish the Saudi National Guard under the command of Prince Abdullah, who is now the Saudi king. Prince Abdullah became a guardian of sorts to the six Husseini children after their father died in a car wreck in 1968. After graduating from Brown University, Mr. Husseini took a job with Aramco,which was then in American hands. By 1980, when the Saudi government took over the company, the young geologist was rising fast."Sadad was one of the best engineers I worked with anywhere in the world,"says Edward Price, Aramco's president at the time.

THE CAPACITY QUESTION. The Debate: Industry experts are divided over whether global oil production has peaked. The Background: Pessimists say big new discoveries are unlikely; optimists say innovation and investment will yield more. The Saudi Factor: Last weekend, Saudi Arabia said it would move to boos tproduction capacity. Mr. Saleri's route to Aramco was more circuitous. Born to a prominent Armenian family in Istanbul, he studied in the U.S., then joined Standard Oil of California, now Chevron Corp. His job was to take all the known data on an oil field -- well-flow rates, geological core samples, seismic charts-- and predict how the reservoir would behave under different production scenarios. "I basically sat in a dark room and crunched data," he says. In 1978, Chevron sent him to Saudi Arabia for a seven-year stint as a consultant to Aramco, where he met Mr. Husseini. The oil world was about to experience a price spike that began with the Iranian revolution. For three years, starting in 1979, Aramco pushed its oil production to nearly 10 million barrels a day -- still its all-time record.What happened next bears directly on Mr. Husseini's current view. The effort to draw out so much more oil, he says, nearly crippled the kingdom's mightiest fields. The pressure in many of them plummeted. Water seeped into oil zones."They were going hellbent for leather to take care of world demand,"he says. "And then we spent the next seven or eight years cleaning up the mess."

After Aramco began cutting back on output in 1981, Mr. Husseini worked to mend its huge reservoirs -- and to understand them better. In 1992, he persuaded Mr. Saleri to join Aramco full-time to help create computer-simulation models of all Saudi oil fields. The two men worked side by side on some of Aramco's most ambitious projects, including the development of a vast oil field called Shaybah, deep in the country's remote and forbidding Empty Quarter. It was at Shaybah that Mr. Saleri had what he calls his "big eureka moment."Aramco had developed the field using hundreds of wells that went down, then snaked horizontally. But when Shaybah came on stream in 1998, its production fell short of the planned 500,000 barrels a day. Mr. Saleri led an aggressive campaign to drill a new batch of extraordinarily long wells, many with multiple branches shooting off in all directions. Shaybah's production shot up. "That was a true engineering breakthrough," says Rick Chimblo, Aramco's chief geophysicist at the time.That success helps explain why Mr. Saleri is now such an optimist."Shaybah brought me fame," says Mr. Saleri. "And it made me realize how the old rules no longer applied."

Mr. Husseini applauded Mr. Saleri's accomplishment. But soon, the two executives were disagreeing on key forecasts. In 2001, Aramco was looking to open the kingdom's vast Empty Quarter to foreign natural-gas exploration. Mr. Husseini estimated that the area contained at most about 30 trillioncubic feet of gas -- not large by Saudi standards. Mr. Saleri predicted the area would yield 10 times that much. So far, drilling in the area has found no commercial quantities of gas. At around that time, rising oil demand revived discussion within Aramco overwhen and how to boost the kingdom's production capacity, then just over 10 million barrels a day. Then, as now, Messrs. Husseini and Saleri had sharply different views on the issue. Recalling his experience in Shaybah, Mr. Saleri argued that the kingdom could hit 15 million barrels a day and hold that level for decades. Mr.Husseini, remembering the missteps of the late 1970s, pushed for what he calls "a realistic, gradual approach." Fifteen million barrels a day would be sustainable only briefly, he said, and then only with huge effort and expense."My view is that you produce a field for the longest period of time at the least capital cost," says Mr. Husseini. "Nansen comes from the international-company school of thought, which is to get the maximum amountof oil you can in the shortest time."

In recent months, Saudi leaders appeared to have adopted Mr.Husseini's view. Local reports quoted King Abdullah saying that some new discoveries should stay in the ground. "With grace from God, our children need it," he said. Mr. Naimi, the oil minister, announced that Aramco saw no need to go beyond 12.5 million barrels a day next year. But on Sunday, under heavy international pressure, the kingdom revived its earlier promise to push for the far higher target of 15 million barrels a day. Mr. Husseini, once viewed as a shoo-in to be Aramco's top executive, left Aramco in March 2004 after clashing with other senior managers overproduction targets and other matters, others at the company say. Mr. Husseini declines to explain why he left, saying only: "I'd done all I could to support all our collective objectives without having to do anything I would feel embarrassed about." Months later, he issued his first gloomy take on the world's oil. Forces ranging from resource nationalism to depletion rates in the biggest fields, he wrote in Oil and Gas Journal, meant that oil prices will continue to escalate through the end of the decade. By fall he was warning that consumers shouldn't expect any big Saudi production increases over the next decade. His statements earned him several sharp rebukes from the Saudi Oil Ministry, though Mr. Husseini insists that his relations with the country's top oil officials remain warm. Mr. Husseini says he often bumps into Mr. Naimi, the Saudi oil minister, in their Dhahran neighborhood or at parties. "We are great friends. I see him all the time," he says. Mr. Naimi declined to comment.

By last fall, anxiety was growing within the industry and on Wall Street over whether long-term supplies could keep pace with the rising world demand. Mr. Husseini stoked those fears at a London conference in October. The major oil-producing nations were inflating their oil reserves by as much as 300 billion barrels, about one-quarter of the world's proven reserves, he said, while the giant fields of the Persian Gulf region are 41% depleted. Mr. Saleri, who left Aramco in September, doesn't share those worries. He has hired a half dozen former Aramco and Chevron officials and opened a business in Houston. His company, Quantum Reservoir Impact, says it has the reservoir-modeling and management know-how to revive declining oil fields. Mr. Saleri is now shopping his services to big national oil companies in Latin America and the Middle East, though he has yet to sign any contracts.

In a Wall Street Journal opinion piece in March, he dismissed the peak-oil theory. "The world has plenty of oil," he wrote. Three weeks later, Mr. Husseini flew to New York at the invitation of a clutch of high-powered financiers, including Mr. Soros, Leucadia NationalCorp. Chairman Ian M. Cumming and Aubrey McClendon, the chief executive of natural-gas company Chesapeake Energy Corp. The group of about 20 met for dinner in the 21 Club's wine cellar. Mr. Husseini declines to comment on the session. One guest says he spoke mainly about the geopolitical thunderclouds hovering over the oil market, especially the U.S. and Israeli standoff with Iran. In a longer presentation the following morning, he argued that the world will have to work hard just to keep its oil production where it is. Conservation, not new oil discoveries, will be "the primary source of overall energy availability" going forward, he said. He delivered the same message to oil magnate T. Boone Pickens over lunch in Chicago. "It was just two oil guys talking," says Mr.Pickens, adding that Mr. Husseini's views dovetail with his own.

Messrs. Husseini and Saleri remain collegial, though they haven't spoken for months. Both see the other's views as largely a matter of personal disposition."Sadad by nature sees the dark clouds overhead," says Mr. Saleri. "He's a pessimist."His former boss laughs at the description. "The problem with Nansen,"he says, "is that he loves his theories, even when they run up against reality."

Labels: oil companies, oil supply, oil supply/demand, peak oil

Wednesday, May 28 - There are two sides to every coin. While consumers struggle to assimilate $4 per gallon for gasoline, the oil industry itself faces a maelstrom of hurdles in supply-side economics. Not only have costs more than doubled for developing a new oil or gas field, the backbone of the oil industry is within 10 years of retirement. Competition over equipment and personnel have effectively delayed new projects while driving up operating costs.

Daniel Yergin highlights the woes facing the oil industry - points typically neglected in media coverage - while uncovering supply-side factors forcing oil to its breaking point. For the full text of this article, click here.

Labels: economy, oil companies, oil supply, oil supply/demand

In remarks that flew under the radar screen of American media, Saudi Arabia's King Abdullah revealed orders to preserve new oil discoveries untapped, in order to extend the reign of oil wealth in his country. "When there were some new finds, I told them, 'no, leave it in the ground, with grace from god, our children need it'," King Abdullah said.

King Abdullah's position mimics that of Saudi oil minister Ali al-Naimi who, when asked "How high can your production go?" replied, "We’ll get to 12.5 million barrels a day and then we’ll see." Current Saudi production capacity stands at roughly 11.3 million bpd.

To read more on this subject, including the responses of American energy analysts, click here.

Labels: energy policy, oil supply, peak oil

Russia, the world's second-largest oil producer, indicated that it has hit a plateau in production. In fact, Russia’s oil production last month, 9.76 million b/d, declined 1.3% compared to March 2007. Compared to last October’s high-water mark of 9.93 million b/d, production has declined 2.4%.

Previously, the Russian Natural Resources Minister warned that a drop in oil production was likely for 2008 compared to 2007. The downturn in Russian oil production did not come as a surprise within the country, since various Russian experts during 2004-2005 vocalized concerns about future slowdowns.

The lack of sufficient pipeline capacity, high decline rates from aging fields, and tough new tax regimes all grab some share of the blame for the stagnant oil production rates. It is predicted that Russia will cut taxes on oil companies to encourage development of new, harder-to-reach deposits and thereby alleviate the market stagnation.

The full text of this article appears in the April 14, 2008 edition of Peak Oil Review, courtesy of ASPO-USA. To link to the article, click here.

Labels: oil supply, peak oil

Oil prices set a new record high during trading on Wednesday, April 9, topping out at $112 per barrel. Rising oil prices can not turn to OPEC for alleviation, as producers maintained their decision to cap production at current levels.

Additionally, the larger than anticipated fall in U.S. crude and gasoline inventories coupled with the declining value of the dollar spurred oil trading on to a record high.

For more, click here.

Labels: oil price, oil supply

Below is an excerpt from an ASPO (an organization that studies oil supplies) newsletter - interesting to note more and more mainstream oil and gas executives are warning about supply problems in the near future.


"Shell’s CEO, Jeroen van der Veer, made headlines last week when in an email to company staff he stated that "Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand."
In face of the declining availability of oil, Shell envisions one of two scenarios. The first is a "Scramble" in which the world’s oil importers engage in a mad dash to secure oil supplies and an increasing use of coal and biofuels. The alternative scenario, "Blue-prints", envisages a world of political cooperation between governments on efficiency standards and taxes, a convergence of policies on emissions trading, and local initiatives to improve environmental performance of buildings.
Van der Veer joins an increasing list of organizations, newspapers, government officials who are willing to publicly acknowledge the reality of imminent peak oil…without using that wording. With a few notable exceptions, such as ExxonMobil and BP, most major oil companies and the International Energy Agency have at least hinted that serious problems are just ahead."

Labels: oil supply

While short and sweet, and probably little noticed, there was a recent article in the Economist about Christophe de Margerie - Chief Executive of French oil company Total. It was significant because in it Mr. de Margerie declared that 100 million barrels per day of worldwide production would be difficult to achieve, much less the 120 million barrels per day the world is projected to need. This is definitely the first time the CEO of a major oil company has acknowledged that oil production increases are and will be increasingly difficult to achieve - a milestone to be noted.

Read the article here.

Labels: oil supply, peak oil

How long will it be before gas reaches $5 - $6 a gallon? And contrary to what many are saying, the issue is a little more complicated and troubling than the notion that U.S. oil companies are simply being greedy. We have an emerging energy supply problem that the whole world, including our own federal government, must work with energy suppliers to address.

Denver Post News Brief, 5/21/07:
Camarillo, California

Gas reaches record U.S. average of $3.18

The average price of self-serve regular gas hit a record of $3.18 a gallon, rising more than 11 cents in two weeks, accroding to a national survey released Sunday.

That topped the record of $3.07 set two weeks ago and the previous inflation-adjusted record of $3.15 in March 1981, said the Lundberg Survey of 7,000 gas stations.

The lowest average for regular fuel was $2.87 in Charleston, S.C.; the highest was $3.59 in Chicago.

Labels: gas prices, oil companies, oil supply