It’s a little difficult to answer because there are two different kinds of money we’re talking about: what will industry spend and where should government spend? Because if the industry is going to spend money on shale gas, which it is, then the government doesn’t have to spend any money there. Shale gas is a natural answer to the near-term energy problem; it’s one of the big answers we’ve got.
In 2000, Saudi Aramco had just one offshore drilling rig active. By early 2009, the Saudi offshore drilling fleet, either owned or contracted, reached a high of 29. (6/24, #15)
Asking why oil companies are interested in Iraq is like asking why robbers rob banks: because that’s where the money is. You can’t choose where the resources are. The risks Continue Reading
Will we have a shale gas boom? I’ve described the contentious argument among those who follow the natural gas industry. Generally, my sympathy lies with skeptics like Art Berman. As someone who has written extensively about peak oil, I’ve encountered the human proclivity to hype a situation far beyond any semblance to reality time and time again… Nevertheless, I’m going to say the jury is still out on this one. That’s not a cop-out, because the verdict will be in very soon, certainly within the next few years.
By crushing demand, we are in effect gaining two more years, maybe three, in which we in the consuming world have added to our time before the peak, and could take good advantage of, since the peak is right upon us-I have it still at 2015 for all liquids. But, given the way we’re going about it, given the politics, given the direction of the world–like the Chavezs nationalizing all those oil service companies, and the continued Russian attitude–I don’t think that mankind is going to take advantage of those extra two or three years.
“I’m a free-market guy, but the government must step in to stop the [oilprice] speculators!” [Ed. note: can one make a more oxymoronic statement?]
Assuming the Bubble Next Time thesis is correct, where does that leave us? We will eventually get inflation rates over and above the 1-2% currently priced in. Burgeoning consumption in emerging economies will cause commodity prices will soar again as they did in the period 2003-2008:H1. The sky will be the limit for a barrel of oil. The United States economy will remain in the doldrums for many years. This is a worst of both worlds scenario. We hope for the best but in 2009, why shouldn’t we expect the worst?
Global oil production peaked in 2008, and I think that as you scale back activity around the world, both because of low prices and the credit crunch, you going to Continue Reading
This outlook might fly in Disney World, but it is clearly impossible in the Real World. This leaves CERA with a public relations problem. Not only must they disavow their fantasy forecasts, but they must also explain away the fact that world oil production will probably never exceed its July, 2008 peak.