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Page added on March 3, 2012
Big Oil moving fast to get ahead of Peak Oil
Christophe de Margerie, chief executive officer of France’s global integrated oil company Total SA ( TOT , quote ), has emerged as one of the highest-profile supporters for the peak oil school of thought, which contends the world will eventually run out of economically extractable petroleum.
Crude oil: fractional distilation
Big Oil companies like Total seem to have strapped on their “exploration mojo” as The Wall Street Journal termed it recently, with Eni ( E , quote ) announcing a major find off Madagascar and YPF Repsol ( YPF , quote ) striking big shale oil in Argentina .
Lukoil ( LUKOY , quote ) is hunting even bigger discoveries in West Africa.
But the mother of all oil companies has its sights on what could become a huge play. ExxonMobil ( XOM , quote ) recently signed an agreement with Kurdistan, where there is an estimated 45 billion barrels of oil and up to 200,000 billion cubic feet of gas.
As JR Ewing once said to his sibling and partner in Ewing Oil, Bobbie, about the potential for exhausting the supply of crude, “The world’s been running out of oil since the first barrel was pumped, little brother!”
ExxonMobil’s CEO has testified to Congress that he does not believe oil should trade above $60 to $70 a barrel.
With West Intermediate crude topping $110 per barrel once again, it looks like demand for petroleum is not going over a cliff any time soon.
If so, that end of the fundamental supply/demand equation seems to be arguing against Exxon here.
But maybe Exxon knows more about the long-term supply outlook than its somewhat smaller rivals.
TOT may simply be having more trouble getting the deals, and so it is closer to “peak” than its gigantic U.S. counterpart.
10 Comments on "Big Oil moving fast to get ahead of Peak Oil"
Kenz300 on Sat, 3rd Mar 2012 2:05 am
A spike in oil price means windfall profits for oil companies and oil producers. They love it. As long as they have a monopoly on transportation fuels they have the world backed into a corner.
Rusty Baker on Sat, 3rd Mar 2012 2:12 am
So-called “Peak Oil” theory is just a theory engendered by liberals to swindle the American middle class out of our hard-earned money by making us pay higher gas prices. Don’t believe the liberal hype; there is no oil shortage. In fact, the good ole USA is actually exporting about a million barrels of oil a day, that’s proof that the US is awash in oil-and that’s not even counting all the billions of barrels that are still waiting to be extracted in the Bakken shale, Alaska and Gulf of Mexico.
This is a link to a video that scientifically disproves the “peak oil” myth: http://www.youtube.com/watch?v=isRIMZi0SB0
BillT on Sat, 3rd Mar 2012 4:02 am
Ah Rusty, you are drinking some strong denial cool aid there or smokin’ the really good stuff, or both. Yes, we export a million barrels per day of the 10 we import. So what? We still burn the other 9 plus what we can still squeeze out of the ground. We are sliding down the oil slope, not going up it. The blip of shale oil is just that. And the discovery of a few billion barrels somewhere is a drop in the ocean of demand. And all new oil is years away from being delivered to a refinery.
Harquebus on Sat, 3rd Mar 2012 4:04 am
Nothing like the smell of freshly printed currency, eh Kenz300?
Gale Whitaker on Sat, 3rd Mar 2012 5:09 am
If there is plenty of oil in the world why is the price $109/b?
Rusty Baker on Sat, 3rd Mar 2012 7:08 am
Kenz300 is right that the oil companies love the windfall profits from spikes in oil prices. They have a monopoly on oil prices; they like milking the hardworking middle class of America out of our money. Honestly, I’m just sick and tired of all this corruption going on in the government and oil business.
Gale, the reason that oil prices are rising is because of oil company greed. The oil companies and government bribe liberal scientists to proclaim that we’ve reached “the peak” to justify high oil prices. But the truth is that the the USA is swimming in oil, however, environmentalists won’t let us build the Keystone XL pipeline or drill off the coast in Alaska and California.
Also, OPEC is capping production and claiming that they can’t produce anymore oil, in order to keep raising oil and gas prices, so they can make even more billions of dollars. In spite of that, the American president keeps bowing before the Saudi king and kissing his jewels.
In conclusion, we need to break the oil and environmentalist monopolies and tell these self-righteous liberal environmentalists to stop preventing drilling for oil here in the United States. If environmentalists want to protest oil drilling and pipeline building, then they should stop driving cars and using electricity. If they were true environmentalists, they’d be out livin’ in the woods eatin’ bugs and roots in thatched mud huts.
BillT on Sat, 3rd Mar 2012 10:34 am
Keep smokin’ Rusty…and let the real world pass you by. By every account given by “real” sources not owned by Big Petro, there is, at best, about 3 years worth of oil still to be discovered in the 50 states of America. Tar sands and shale oil are peaking out already and will decline in the shrinking economy to come. Both require a lot of investment and energy to exist, meaning, they require high prices to profit. Ditto all the other oil sources in the world. While I do not argue that oil companies are making a profit, they need it to keep their investors happy and investing. When the profits drop, so do the investor’s interest and profits.
BTW: Nations own 80% of the world’s oil, not oil companies and likewise 75% of oil companies are nationally owned, not private. That means that the control of oil prices are out of the hands of any one country and controlled by the market. There is no way the US can become independent unless we cut our use by at least 60%. Are you ready to do that? No, then pay to have that SUV in your driveway. And pay and pay and…
Did you know that it takes years AFTER a new field is opened until the first drop of oil gets to your local gas station? Check it out. The North Slope took 9 years. By then we will be approaching that big cut mentioned above.
rebecca on Sat, 3rd Mar 2012 6:44 pm
Hey Rusty, I am what you’d call liberal when it comes to oil. I think the US needs to wean itself off oil BEFORE the price shocks become too severe and we pollute the land, sea and air anymore.
I’m also doing my part to seer that happen. My electic bill is $35/mo, I dive a 40MPG car, work at home and make few trips. I keep my home heat set to 54 degrees all winter- ALL the time, and heat my work space to 60 degrees. I promote local living, local food, and conservation. I don’t have TV and plan on riding my bicycle a lot more this year. Sure not all people who say oil is bad for us are willing to actually do something about it, but some of us are.
I would also note, that people like you seem to have religious convictions about oil suppply and how prices are set, that is, a belief that cannot be backed up with facts and evidence. Therefore I know you will not take the time to really research peak oil. Your mind is alreadt made up. You appear to be in the first 1-2 stages of grief. Denial and Anger. That won’t make peak oil go away.
Kenz300 on Sat, 3rd Mar 2012 11:54 pm
China and India are using more oil every day. That increase in demand is not going away. China is now the worlds largest auto market. The price of oil is rising. There is very little we can do about it other than change our habits and use less.
Brian on Sun, 4th Mar 2012 8:02 pm
Don’t waste your breadth Bill. People like Rusty are never going to get it. No matter how much evidence or logic you put in front of them they are still going to scream as loud as they can with their hands over their ears that it’s a liberal conspiracy to extract wealth from the hard working Capitalists. As things fall apart people like Rusty will stand in their living rooms screaming at their TV (which won’t be working since electricity will be intermittent) trying to find anyone to blame.
It’s going to be dark times ahead for some, but not everyone needs to suffer. You have a small amount of time, hopefully years but likely only one or two, to figure out how to integrate in to your community and as a collective whole focus on resilience and sustainability. If you deny this reality then in the future you will only have yourself to blame. That is our reality, becoming more real every day.