[AirlinePilot]

$this->bbcode_second_pass_quote('yesplease', 'T')he big questions seem to be how much will world demand drop and how much oil will OPEC cut to keep prices up?

[seahorse2]

Even if the IEA reserve figures are right, it doesn't matter. The opinion that we have enough reserves to get us to 2030 rest on one big ASSUMPTION which is, the world will make the investments to get at the new oil reserves. The problem with this ASSUMPTION is we know in fact, its not true, bc when oil was at $140 a barrel the necessary investment wasn't being made and already, with the price of oil crashing, there are numerous reports that projects are being delayed and or canceled.

Saudi may cancel plans due to financial crisis:

http://malaysia.news.yahoo.com/rtrs/20081108/tbs-aramco-refineries-total-7318940.html]Saudi

Oilsands delay due to financial crisis:

http://royaldutchshellplc.com/category/oil-sands/]Oilsands delay

Financial crisis hits oil investment"

http://www.forbes.com/afxnewslimited/feeds/afx/2008/11/06/afx5659317.html

[Twilight]

Lack of resources, lack of investment and lack of access by investment amount to the same thing in the end. Pick your poison, the effects are literally no different. So claiming that there is no shortage of supply given adequate future investment penetrating hitherto closed markets is just going round in a circle.

[VMarcHart]

$this->bbcode_second_pass_quote('AirlinePilot', '.')..the possible political or social problems brought on by the lower [oil] prices in these places will cause unforseen events which push prices right back up.

[smiley]

$this->bbcode_second_pass_quote('', ' ')Neither the IEA or any other group has the data necessary to answer the simple question: how much proven oil is in the ground today.

[sjn]

$this->bbcode_second_pass_quote('VMarcHart', '')$this->bbcode_second_pass_quote('AirlinePilot', '.')..the possible political or social problems brought on by the lower [oil] prices in these places will cause unforseen events which push prices right back up.

[Twilight]

The IEA has a soft political colour, its origin lies in the 1973 oil shock and the need to mitigate further disruptions of that sort, and it is basically an OECD club.

However, it is no different to any other official organisation in that it does not have the luxury of staking its reputation on unprovable assertions. Since it cannot prove that ME Gulf reserves were inflated in the 80s, or by how much, it is not going to go out on a limb and publicly use the possibility in its planning assumptions. Not without a smoking gun in the form of documents and names or a further sea change in sentiment.

I see a similar phenomenon in the LCPD, no-one in utilities would openly voice the belief that the government will repudiate an EU directive, so it lives on in projections as one of those absurdities that screws up the figures and periodically generates dumb headlines. Circumstance compels scepticism, but you cannot run with it.

The problem with putting yourself in that position is if you are wrong about just one part of it, you lose a lot of face and step on the toes of people who probably have more pull than you. Maybe there is a rabbit in the hat, probably not what we really need, but enough to cause severe embarrassment if someone tries to call the bluff. And that is why you cannot expect investigative journalism to come out of official bodies. All we can do is what we already do, which is question the validity of the underlying assumptions. The authors are not at liberty.

[seahorse]

CFR sees lack of oil investment due to price drop, which, if the IEA is right, means we will not be stemming the decline in existing fields.

CFR

[AirlinePilot]

As SJN pointed out there are a host of problems just boiling below the surface right now in many of the producer nations. Nigeria, Saudi Arabia, Mexico, etc. All have very precarious balancing acts going on right now and I would expect that with large economic downturns in any of those places you could see some serious issues which may directly affect production.

Simple speculation but the trends will not go in the right direction with the global situation and lowering oil prices IMHO.

[TheDude]

$this->bbcode_second_pass_quote('ROCKMAN', 'N')either the IEA or any other group has the data necessary to answer the simple question: how much proven oil is in the ground today.

[CarlosFerreira]

Just read the executive summary; the perspectives are not good. The IEA is doing what it has to do, telling everyone that peak oil isn't predicted until 2030, BUT that investment is needed to keep up with demand. They're asking for 26 trillions investment to do it (which necessarily will increase the marginal cost of barrel) and saying that most expected production will come from OPEC countries (which means it comes from a cartel).

So, price is going through the roof, we just don't know when. Brace yourselves, buy that bicycle now.

[Commanding_Heights]

Dang I clicked on this thread (seeing the OP) thinking He's Back!, let the arguments begin!

[yesplease]

$this->bbcode_second_pass_quote('AirlinePilot', 'I')'m starting to form the thought that if prices crater low enough and long enough, something else will solve the price problem for them (producers/exporters). If the price stays down long enough and they cannot control it with cuts, then the possible political or social problems brought on by the lower prices in these places will cause unforseen events which push prices right back up.

Longer term these lower prices will impact production and we'll move back towards balance at some point. Hopefully we can do it without a minor nuclear conflagaration or some terrorist group sinking a few tankers in the straights of Hormuz.

[KevO]

$this->bbcode_second_pass_quote('AirlinePilot', '"')World oil supply is projected to rise to 106 million barrels a day in 2030 from 84 million in 2007, with the bulk of the increase expected to come from members of the Organization of Petroleum Exporting Countries."

84 million in 2007.

106 million in 2030.

World oil production has been on a plateau for almost 4 years.
Who here believes that with the global economic climate we are currently experiencing the needed production can or will happen?

[seahorse2]

The IEA's latest report said existing fields are declining at over 6% per year, up to 9% a year if not maintained. It said that just to run steady, maintain a plateau, the world needed to keep finding, drilling and producing lots of new oil.

The problem is, with this economic downturn, the world is not looking for and drilling new oil. Thus, the problem arises that production will soon be decreasing by 6-9% per year without investment. My fear is that this current depression leads to a vicious race to the bottom. That lack of investment leads to ever decreasing oil production, further killing demand, further leading to lack of investment, further killing world GDP. The world system, as we know it, cannot survive if oil production decreases at the rate of 6% per year. I hope this simple outlook is wrong.

Evidence reported today out of Iran that the worse case scenario is unfolding.
$this->bbcode_second_pass_quote('', '[')b]Iran's Oil Output May Fall 25%; Exports May Cease, FACTS Says By Dinakar Sethuraman:
Dec. 9 (Bloomberg) -- Iran, the second-largest crude producer in the Organization of Petroleum Exporting Countries, may reduce output by as much as 25 percent and cease exports because of ageing fields and a lack of foreign investment.

Crude oil production may fall to as much as 3 million barrels a day by 2015 from 4.02 million last year and the country may halt exports, pending the approval of refining projects, after shipping about 2.3 million this year overseas, Singapore-based Facts Global Energy said in a report today. Iran has plans to produce 4.5 million by 2010 and 5 million after 2015.

``Without a major change in policy and investment climate in Iran, crude oil production and exports are projected to decline drastically in the future,'' analyst Vijay Mukherji said in the report e-mailed today. ``The incremental supply that Iran is promising to the world will simply not be available.''

Iran faces the prospects of an 8 percent annual decline in production of as much as 700,000 barrels a day because of a lack of investment and old technology. Sanctions by western nations and a tight credit market because of the global financial crisis have crimped financing for Iranian projects while a 70 percent decline in crude oil prices since July cuts investments.

The Middle Eastern nation may partner companies including China Petrochemical Corp., also known as Sinopec Group, StatoilHydro ASA and Oil & Natural Gas Corp. to develop new projects in areas such as Anaran, Azadegan, Yadavaran, Jofeir and Farsi, the report said.

Sinopec Group: National Iranian Oil Co.'s contract with Sinopec Group for Yadavaran has a lower payback period and a higher return of 14.98 percent, a premium of as much as 3 percent compared with older contracts, reflecting Iran's push to secure foreign investment, the report said.

"We project that new field development projects will somewhat help in compensating the loss from natural declines in mature fields, but in our view, unless current political and financial impediments facing the oil industry are removed we do not envision production exceeding 4 million barrels a day,'' the report said.

Iran extracts as little as 20 percent of the oil from the ground because of lack of adequate projects to enhance oil recovery by injecting natural gas into the ground, the report said.

Iran may add more than 450,000 barrels a day of crude distillation capacity between 2008 and 2015 through expansions and upgrades at refineries in Bandar Abbas, Arak, Lavan, Tabriz, Isfahan, and Shiraz, the report said.

Crude oil exports may drop to about 1 million barrels a day by 2015, and if an additional 800,000 to 1 million barrels of refining expansions are approved, crude exports could :decline to almost nothing,'' the report said.

To contact the reporter on this story: Dinakar Sethuraman in Singapore at dinakar@bloomberg.net.

[dukey]

Are the tar sands even viable at $40/barrel? that's a million barrels a day gone ..

[Tanada]

I disagree, there is no recorded proof that demand destruction has ever been sustained for more than a year or two and even if we destroyed 10 Mbbl/d of demand it would not take more than a few short years for 9% depletion rates to catch up to that level of production, which in turn drives prices back in the other direction, encourages investment and slows declines even if it doesn't cause things to go back up.

[MD]

$this->bbcode_second_pass_quote('Tanada', 'I') disagree, there is no recorded proof that demand destruction has ever been sustained for more than a year or two and even if we destroyed 10 Mbbl/d of demand it would not take more than a few short years for 9% depletion rates to catch up to that level of production, which in turn drives prices back in the other direction, encourages investment and slows declines even if it doesn't cause things to go back up.

[Plantagenet]

It all depends on how deep and how long the recession is. If we have a global depression thats lasts 10+ years, then we'll see continued demand destruction and deflationary pressure on oil prices for 10 years.......

[vision-master]

$this->bbcode_second_pass_quote('', 'T')he Hopi Survival Kit - Chapter 6 - Prophecies Past and Present - Page 207/ 208.

Hopi Elders Quote:

Quote:
Let us take a look into the future through the eyes of our prophets. They say that along the way the industrialized world will have certain problems. Throughout the world people will be uncomfortable because of the changing times. The worldly woes people will be going through. People will have to make adjustments to fit themselves into new life styles and environments.

The industrialized nations will become careless in getting more of the resources they need out of the earth, oil, coal, etc. Believing all these things will last forever. Soon natural resources will be depleted. Fuel shortages will occur; industrial machinery will come to a standstill. The machinery used for planting, harvesting and transport will become useless. The white man (Bahanna) with all his intelligence and technology will not be able to repair the damage.

Now let us review our knowledge briefly, the centuries old prophecies which warned us what would happen when we forgot the principles of right and wrong in our behavior. We will see extraordinary events in Nature and Earth, including mankind: because modern man ignores the wisdom of ancient culture and religion. Modern man looks upon old wisdom and knowledge as dead, useless and no longer respected.

Modern man began to depend on the money system and no longer Mother Earth for food. According to prophecy when this happens Mother Earth will hide the nourishment which she provides because of the view that ancient food is poor man’s food.

When all food disappears modern man will try to correct his mistake, the conditions he caused upon the earth through his inventions. He will try to achieve some kind of method to heal the wound, but this will not be possible when we reach the point of no return.

Only through peace the survival of mankind and our planet Earth is possible. Only if we, the human race, are willing to change.