Peak oil or is it that oil has peaked

Peak oil or is it that oil has peaked. What a week in energy as history was made in more ways than one. Oh sure, you can focus on prices and economic fears in a week where risk aversion became the flavor of the day, yet if you do that, you might miss some of the more interesting stories that surround the complex . This was a week we saw the good side of high energy prices and how the quest for energy and profits inspired minds to take steps to solve some of the greatest challenges facing the energy industry today.
And talking about ingenuity, how about that big oil discovery from BP? Imagine drilling almost 7 miles deep in the ocean and discovering billions of barrels of oil. High prices have opened of a number of possibilities that has pushed back “peak oil” theory for generations. The Wall Street Journal points out, “To get at the ultra-deepwater oil field, BP had to drill to record depths – deeper than Mt. Everest is high. Still, with oil at $70 a barrel, there could be $70 billion trapped in the ancient rocks. These are precisely the kinds of oil fields that were technologically off-limits until recently, when the combination of improved drilling technology and seismic imaging techniques brought them within reach. And BP’s latest find, coming a few years after another big find at the Kaskida field, just shows how the once-dismissed Gulf of Mexico could prove a source of abundant – and politically-stable – oil for decades to come. “

Yet at the same time the Journal says the discovery underscores exactly how tough the oil-exploration game is becoming. To actually pump the oil, BP’s technical challenges are just beginning; other Gulf fields have taken years to bring on line. At the same time, there could be a huge difference between the amount of oil in the Tiber field and the amount of oil that BP and other companies can actually extract. Some comparisons with Kaskida suggest recovery rates as low as 5-15%, which in a worst-case scenario could mean a paltry 150 million barrels of oil, or a weekend’s worth of global consumption. As time goes on and technologies improve this pumping could become easier and easier.

FXStreet