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Page added on June 17, 2014
IEA Says North America to Be a Products Titan
So Peak Oil is dead, yeah? Well, to a point. The Financial Times editorializes that while the “bell-curve” theory of production has been broadly disproved, the oil price remains stubbornly high because Peakists were right about the easy oil having been already found and drilled.
North America is on course to produce 20% of the world’s oil supply by the end of this decade, and become a “titan of unprecedented proportions” in oil-products markets.
So says the International Energy Agency, which points out that just a decade ago the U.S. was the largest importer of refined products.
All this is thanks to that shale revolution, of course. U.S. crude-oil production in 2013 increased by a massive 15% from a year earlier, reaching the highest level since oil tycoons looked like Larry Hagman. In 2015, output should be close to the 1970 historical peak. The effect has been so great that oil, not agriculture, is now North Dakota’s biggest cash cow.
The IEA now believes the shale boom will spread beyond North America before the end of the decade, sooner than previously expected, but supply growth will be stymied by underinvestment and political turmoil in many historically important producing nations, such as members of OPEC.
Iraq, Iran, Libya, Kashagan, the Arctic, the North Sea, offshore Brazil, the Niger Delta—all are big producing regions, all have output problems. These are all taken into account when the price of oil is calculated.
The FT says talk of an “age of abundance” in oil is justified only from a North American perspective.
RUSSIA TURNS OFF THE TAPS
To the surprise of no-one, Russia has turned off Ukraine’s gas.
Moscow says it won’t put the taps back on until Kiev pays the money it owes and fronts cash for future deliveries.
Ukraine says it won’t pay out until Russia cuts its asking price. Words like intransigence and blackmail are flung back and forth across the border.
During a cutoff in Ukraine’s gas supply in 2009, exports to Europe also took a hit, with Gazprom saying that Ukraine had siphoned off deliveries destined for the EU. The hard truth for Europe is that it just can’t live without Russian gas—yet.
Slowly, Europe is coming to terms with this conundrum on its eastern front. How much longer Russia and Gazprom can play this hand is uncertain. Time is not on Moscow’s side, says fuelfix.
BP BACK IN THE FOLD
It’s shaping up to be a decent week for BP.
The U.K. oil major has won its first new energy contract from the Pentagon since it was sanctioned over the Deepwater Horizon disaster, and in doing so has shaken off its pariah status in the upper echelons of the U.S government.
BP routinely won more than $1 billion a year in Defense Department contracts for aviation fuel before being slapped with a temporary injunction in December 2012 that barred the company from winning or renewing contracts with the military.
BP will also sign a long-term gas-supply deal with China’s Cnooc. The 20-year, $20-billion contract is a spin-off from Chinese Premier Li Keqiang‘s state visit to the U.K.
MARKETS
Brent crude prices fell back Tuesday as concern that the violent insurgency in Iraq would affect exports began to wain. You can read the Journal’s latest oil-markets report here.
10 Comments on "IEA Says North America to Be a Products Titan"
Juan Pueblo on Tue, 17th Jun 2014 2:21 pm
Never going to happen!
rockman on Tue, 17th Jun 2014 3:01 pm
In reality the US shale production has little to do with increased product exports. In fact a lot of Eagle Ford production is shipped to Canada because those refineries can produce a more valuable yield then the Gulf Coast refineries. All of our product exports can be accounted for by the oil we import. The US is still a net importer of liquid hydrocarbons and NG.
The US refinery capacity greatly exceeds our domestic demand. We’ve become the world’s gas station not because we have excess oil production but because our refineries can make a profit importing foreign oil, crack it and sell the products overseas..
Westexasfanclub on Tue, 17th Jun 2014 6:11 pm
So North Amercia is going to produce 20% of world supply by the end of this decade? Where do they expect the global amount of C&C to stand? Let’s say US 9mbd, Canada 4mbpd, Mexico 2mbpd, that sums up to 15mbpd, so world production would be 75mbpd. In other words, the world would have peaked, with the exception of North America. So THAT is good news?
hculliton on Tue, 17th Jun 2014 7:37 pm
A “titan of unprecedented proportions”, eh? I love these shale/tight oil masturbation fantasies. I guess the IEF wants to suck in as much foolish investment money before the whole sucker goes down. Either their lying through their teeth or they’ve hit one too many rips off that oil bong because demand destruction’s going to kick in long before the impossible US oil renaissance.
Makati1 on Tue, 17th Jun 2014 11:27 pm
More US Ministry of Propaganda BS!
shortonoil on Wed, 18th Jun 2014 8:51 am
It is obvious that no one reading this site believes what’s printed in this article, but this was published by the Wall Street Journal. For millions of readers it’s gospel! Sort of like the book of Genesis; God made the world in six days, and then took a vacation. For millions everything is fine, US shale will save the world, and Goldilocks got away Scot free from those dam bears.
The Hill’s Group prepared its study, not to inform the world, but to explain to ourselves why 2+2 kept coming up as 5 in the mass consciousness. The world is heading for an energy crisis of epic proportions, but the masses will continue to believe in what the Street pushes down their throats everyday. For the few who have an understanding of what’s occurring it offers an opportunity. Use the knowledge that is not shared by the majority of Street readers, and build your own bridge into what’s to come. We hope that the thousands who have come to our site, and spend many hours studying it will consist mostly of those that do.
http://www.thehillsgroup.org/
Davy, Hermann, MO on Wed, 18th Jun 2014 9:37 am
Short, knowledge is power if you are in power. Some of the TPTB know what is up we can see it in various actions. Yet, some of TPTB believe in miracles and angels? I am not going to deny these things in the realm of the spiritual or abstract theology but do you run for office preaching these things? Do you formulate policy based upon miracles and angels? Many of TPTB really are not that smart. Many rich and powerful are not that smart. These folks got there through a variety of means. More and more it is proper connections and wealth. I for one see the general ignorance of the profound risks ahead as good for two reasons. The first reason is confidence and the maintenance of confidence. My reasons are also selfish. I need 2 to 3 more years to prep for the decent with long term actions. I am ready short term. Long term is expensive in time and treasure. I also feel let the public be ignorant and get hit with a severe crisis. Let’s us hope BAU still functions but in crisis. At this point some reforms at the TOP will have to be made. Lifestyle changes may occur. An example would be high intensity, discretionary, and non-essential activities can be regulated. This can happen with the public believing conditions will improve even though we know the decent will not end until modern man is no more. The second reason is let these ignorant people enjoy life while they can. Some of these struggling ignorant people should have a few more years of pseudo happiness even if that happiness is the thought that “Better is on the way” Many of these ignorant people even if they knew what is ahead are in no way shape or form in a position to prep. What is more likely is a collapse of confidence and likely quick decay of the social fabric. This is coming soon anyway but we still may have a few years of normal. OK, I am ready bash me someone.
Northwest Resident on Wed, 18th Jun 2014 9:39 am
shortonoil — Right you are. The Wall Street Journal, Forbes, Bloomberg and all the rest are pumping out the propaganda and unfiltered BS 24/7/365. The message is constant, consistent, focused and omnipresent. And the message is, “everything is going just fine, stay calm, don’t worry”.
I have expressed my opinion and firm believe that there are a “concentrated few” elites somewhere at the very top who are responsible for the fast-flowing pipeline of propaganda that dumps the bullshit out onto the masses daily. Many have disagreed with that opinion. But, again from my point of view, the sooner everybody realizes that there is a powerful group of cohesive elites hiding behind the curtain, pulling the levers and pushing the buttons, the sooner everything will start to make sense to them, finally.
Here is a quote from way back in 1928 on this topic:
“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. …We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. …In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons…who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind.”
– Edward Bernays – Propaganda – 1928
Davy, Hermann, MO on Wed, 18th Jun 2014 9:59 am
NR, Sounds like the current discussions on the “Deep State” concept.
OK, once a majority is informed of their doom, NR, then what? Not everyone can deal with “Doom” like us doomers.
Northwest Resident on Wed, 18th Jun 2014 10:08 am
Davy — So true. That is why it is important for the Deep State “elite few” to keep the masses calm and reassured for as long as possible. Once they get spooked and something sets off a stampede of panic and mayhem, things will fall apart fairly quickly. Like shortonoil points out, for those us “in the know” (which includes those few elites BTW), this time period of relative calm before the storm can be used to prepare for what is coming. “No everyone can deal with “Doom” like us doomers.” Yeah, ain’t it the truth!