Oil, Smoke and Mirrors (Google Video on Peak Oil)

US Lower-48 oil production (crude oil only) and Hubbert high estimate (URR= 200Gb, K=6%, 1970), the red dotted line indicates the 1956 year (prediction year). Data from the EIA.Image via Wikipedia

This (slightly old) controversial google-video of 2006 is still worth watching. It’s about PeakOil, 9/11 and other issues. Very important viewing if you’ve missed it, even though my opinion of the (second half of the) video is slightly ambivalent; NOT recommended for people who indulge in conspiracy speculations. However, it’s still worth seeing:

Since oil prices have nowadays reached their highest peak till now, it’s also worth looking into the following collection of Peak Oil links:


(new links are being added to this bundle every day)

Many more Peak Oil links can be discovered by searching del.icio.us, although the previous (personal) selection of links has been thoroughly checked out.

Oil production curve
(click on the image to see «Life After the Oil Crash»)

Related articles



  1. New links sent by a friend, as regards the low productivity of Wind Energy:











    Click to access TE_0503.pdf





    Click to access WesternMail050219.pdf






    not to the point but interesting:


    Click to access i8.pdf




  2. Καλημέρα. Φέρνω αυτό το νέο, που δεν το βλέπουν οι μη-συνδρομητές:

    Opec loses its grip on oil prices

    * Published: 09 May 2008 14:55 GMT
    * Author: Ed James
    * More by this Author
    * Last Updated: 09 May 2008 14:56

    As the cartel’s control over the price of crude slips, it runs the risk of becoming irrelevant.

    While they may not yet have triggered a slowdown in the global economy, there is no doubt that high oil prices are becoming a political problem for Western politicians. US Presidential hopefuls Hillary Clinton and Barack Obama traded blows over the impact of the high cost of energy in the Democratic Party primaries in North Carolina and Indiana on 6 May, while UK Prime Minister Gordon Brown blamed his party’s heavy defeat in local elections in early May on soaring energy prices.

    Brown’s words may have been little more than an attempt to distance himself from blame for the defeat, but they highlight the impact that high energy prices are having on Western economies. Brown is among a growing chorus of Western politicians calling for oil producers to raise output. «There needs to be some international effort with Opec to get the oil price down,» he said on 4 May.
    Limiting supply

    But Opec does not appear to be listening. The Vienna-based oil-producers’ cartel, which accounts for about 40 per cent of the world’s crude oil production and holds two-thirds of its known reserves, shows no sign of opening the taps.

    Even though Opec president and Algerian Oil Minister Chakib Khelil said recently that crude prices could hit $200 a barrel, the organisation has no plans to review output quotas until the autumn.

    «Opec will not increase crude oil output,» he said on 26 April. «Supply is more than sufficient in the international market.»

    Opec has historically cut or raised oil production from its members to maintain oil prices within a target price band. In October 2007, for example, when the price of Brent crude had yet to hit the psychologically significant $100-a-barrel mark, the organisation increased production by 500,000 barrels a day (b/d). At the time, Opec secretary general Abdalla el-Badri said the cartel «did not favour oil prices at this level».

    But as Brent hit an all-time high of $120 a barrel on 5 May, there was no indication that Opec was prepared to raise output.

    So if Opec itself views crude as overpriced, why is it refusing to act to reduce prices by agreeing to increase production?

    There are several factors behind Opec’s apparent intransigence in the face of increasing calls for a production increase. One is the traditional softening of oil prices in the summer as warmer weather reduces northern hemisphere energy consumption. Opec will be keen to know how much of an impact that will have before making a move.

    A possible slowdown in global demand is also a factor. Despite rising demand from the emerging economies of China and India, the overall rate of growth in demand for crude has slowed over the past three years, tempering the need for greater output.

    Moreover, the tightening of the global credit markets has left the world economy on a less sure footing than it was a year ago, with many forecasting recession in the US and a subsequent fall-off in demand as a result. «If you look at the pattern of global demand for petroleum, year-on-year growth peaked at 3.8 per cent in 2005,» says Tim Evans, energy analyst at Citigroup Global Markets New York. «In 2006, it was 1.2 per cent, and last year it was 1.3 per cent. These are global figures that include China and India, where demand is growing in a fairly robust fashion.»
    Dollar weakness

    The weakness of the dollar is another factor. As the dollar has declined in value over the past two years, so investors have hedged their positions by investing in commodities such as oil, gold and steel.

    As a result, the price of many key com_modities has hit record highs over the past 12 months. But if the dollar starts strengthening, as it did in early May after the publication of encouraging employment data in the US, it is likely commodities prices will fall. On 1 May, oil futures fell more than $2.50 after the dollar rose to a one-month high against the euro.

    This supports Opec’s claim that market traders currently have greater control over oil prices than oil producers.

    «The fundamentals are not controlling the price,» said Mohammed al-Olaim, Kuwait’s acting Oil & Gas Minister, on 30 April. «You cannot control the price, you cannot predict it, because there are factors controlling the market other than the fundamentals of supply and demand.»

    This view is echoed by Qatari Oil Minister Abdullah bin Hamad al-Attiyah. «Every time the dollar falls, oil goes up as speculators just move to the oil markets,» says Al-Attiyah. «What I hear today is panic about the oil price, nothing about supply.»

    Oil supply and demand data suggests there is plenty of oil in the marketplace. «One simple way of looking at it is to look at OECD [Organisation for Economic Co-operation & Development] inventories of oil, which stood at 53.5 days of supply at the end of last year, according to the IEA [International Energy Agency],» says Evans. «That is above the five-year average. So when Opec says there is no physical shortage, these statistics confirm that.

    «If Opec increases production, it would create an even larger surplus. And while it would be a responsible position for it to take, we cannot really expect it to act against its own economic interests.»

    Others agree. «I see Opec’s logic,» says Sarah Emerson, managing director of Energy Security at US energy consultant ESAI. «Oil is being used differently as an investment class…For a variety of reasons, there has been a desire to buy and hold commodities, so if you are Opec, you are caught between the physical market saying be cautious, and the financial market saying raise production a bit.»

    While increased speculation on the commodities markets inevitably means greater volatility, there is a consensus that oil prices are unlikely to fall below $50 a barrel in the foreseeable future. The experience of the past two years has also shown that the global economy is able to absorb much higher oil prices than previously thought – one reason why Opec was historically hesitant to tighten supply.

    These are risky times for Opec. If crude prices are de-linked from simple supply-and-demand economics, the producers’ cartel faces becoming irrelevant.

    Two recent policy changes in Saudi Arabia could already signify the beginning of the end for the organisation. In an apparent about-turn on its long-standing position that the world could depend on conventional oil supplies alone, state oil company Saudi Aramco is now talking in terms of global non-conventional crude reserves.

    Venezuela aside, the majority of difficult oil, be it condensate, natural gas liquids, extra heavy oil, bitumen, tar sands or oil shale, lies outside Opec control.

    «I strongly believe that between conventional and unconventional liquid fuels, the planet is sufficiently endowed with petroleum resources to meet the world’s growing demand for many decades to come,» said Abdullah Jumah, chief executive officer of Aramco, in Houston in February.
    Future development

    In a second departure from established policy, in mid-April, King Abdullah appeared to suggest that the kingdom was not prepared to keep increasing capacity. «When new discoveries [of natural resources] were made, I told them… leave them in the ground because our children and grandchildren will need them,» he said.

    If Riyadh is not prepared to increase output beyond the 12.2-12.5 million b/d already projected with existing field developments, its ability to act as a swing producer will be diluted, and by extension Opec’s power.

    «Saudi Arabia has said for a while that it will not be pushed to go for overcapacity to push down the oil price,» says Peter Hutton, oil and gas analyst at Irish securities firm NCB. «It is talking about the long-term stewardship of strategic resources, which means the world has to get used to sustained high oil prices.»

    According to the US’ Energy Information Administration (EIA), Opec surplus capacity in April stood at just over 2 million b/d on a total average output of 32.3 million b/d in the first quarter. While this figure is projected to double in 2009, thanks mainly to capacity coming on stream in Saudi Arabia, the longer-term picture is less positive as fields, particularly in the Gulf, start to decline.

    If Riyadh is not prepared to keep pushing capacity, at the current demand growth rate, Opec may find it has no surplus capacity at all in 10 years. If that happens, its ability to control the oil price will become more limited still.

  3. Βρε γιαυτο συζητανε αποξω αποξω για πυρηνικα εργοστασια στην ελλαδα και τα παρομοια?

    Κι οταν αρχισουν να γινονται συμφερτικα τα πετρελαια του αιγαιου (υπαρχουν?) θα γινει της ποπης εδω περα!

    Παντως το φεσι μας το εχουν φορεσει ηδη οποτε δεν στεναχωριεμαι ιδιαιτερα…

    Το μονο ζητημα ειναι που ο γιωργακης ξεφτιλισε πεφτοντας την ποδηλατικη λυση στο προβλημα των μετακινησεων! 😀

  4. @Febr4
    Ναι, όλα σωστά! 🙂

    Η Ελλάδα έχει κρατηθεί επιμελώς μακράν του «φλέγοντος ψίθυρου στον πλανήτη», μπήκε κάπως απότομα για λίγο, σαν «πρόβα» με την απεργία των βενζινοπωλών και θα ταλαιπωρηθεί χειρότερα σε λίγους μήνες.

    Θα πούμε το πετρέλαιο πετρελάκη! 🙂


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