OPEC Reaches Peak Power?

OPEC does not want to reduce output because member countries know their oil is in limited supply and they want to get the maximum price they can muster. I reckon the main issue, however, is that their own energy crisis means they couldn’t even if they wanted to. Peak Power problems are keeping the oil price high, not Peak Oil… but Peak Oil will have its day.

According to Lehman Brothers’ chief energy economist Edward Morse, world markets could have lost one million barrels per day (bpd) of oil in the summer of 2007. This was a result of Middle East power plants being forced to burn crude and natural gas redirected from enhanced oil recovery projects, to meet summer demand for air conditioning.
Morse believes that these “lost” Middle East exports and disruptions from Mexico, drove up oil prices in the latter part of 2007 by a greater amount than the flow of money from hedge funds.

It is important to note that the evils of subsidy have made Middle Eastern residents some of the largest energy users per capita in the entire world. Governments are having difficulty getting rid of these subsidies without causing civil unrest.

The latest data available on World Energy consumption is for 2003 from the World Resources Institute. The figures represent total energy consumption per capita in units of kilograms of oil equivalent (kgoe) per person.

US: 7,794.8
UK: 3,918.1
UAE: 10,538.7
Qatar: 21,395.8
Kuwait: 9,076.0
Bahrain: 10,250.5

The US is decried as the gas-guzzling capital of consumption… but this is only partly true. It is actually the residents of the Middle East who are the largest consumers of energy in the world. With a wealth and population explosion added to the mix, oil-rich countries are facing an unprecedented energy crunch.

Daily Reckoning