In the World Energy Outlook 2012 report the IEA presents its view of future crude oil production (see the figure). With decreases of over 2 million barrels per day (Mb/d) by 2035 both Russia and China have passed Peak Oil. In other nations where crude oil production has previously reached Peak Oil, the decline in their production continues. The savior in this time of need is Iraq with a projected increase in production of 5.5 Mb/d. We have previously heard that ExxonMobil wants to leave projects in southern Iraq and now Statoil is leaving West Qurna at the same time as other intended operators are writing down their production volumes by 600,000 barrels per day. Thus it is now doubtful that an increase in crude oil production of 5.5 Mb/d can be reached. The IEA states that world crude oil production - that was 70 Mb/d in 2008 - will decline to 65 Mb/d by 2035.

A Russian newspaper, Kommersant, is published in Russian but also has a daily English version published online. On January 17 it published an interesting article on Norwegian and Russian deliveries of natural gas to the EU, “Norway is squeezing Russia out of European gas market“. The success with shale gas in the USA has meant that gas prices there have decoupled from the price of oil and are much lower than in the EU. One reason for the higher price of gas in the EU is that the Russian delivery contract for gas to the EU is coupled to the oil price. Norway can now offer a lower price and this, together with the economic crisis in the EU has meant that Russian deliveries of gas have decreased. Another factor is that the liquefied natural gas from Snövit, that was originally intended to the shipped to the USA, must now find another buyer and the capacity to receive liquefied natural gas in Europe has increased. An additional factor may be that development of new natural gas fields in Russia is delayed which means that the gas available for export from Russia is declining.

A moment ago I was contacted by Simon Tulett, Business Broadcast Journalist, at BBC Radio 4. He wants me to participate in tomorrow's "Today" programme that is broadcast from 7 AM Swedish time (6 am G.T.). The theme will be "has shale gas/fracking ended the peak oil debate?" Someone from Citigroup who asserts that ”Shale oil fracking has killed Peak Oil” will also be participating in the debate. It is interesting that in recent days I have been working on a newspaper debate article on "fracking" and earlier I wrote in my blog that, The “fracking bubble” of oil optimism that is currently being inflated by the oil industry will soon “fracture”.

BBC Radio 4 on line or later

Björn Lindahl has published an article on activities and investment on the world’s seas. (20120108 in Swedish in the edition of Svenska Dagbladet Industry [the business section of one of Sweden’s major broadsheet newspapers].) He states that 59,000 freight ships ply the world’s oceans and that the world’s shipping turns over $183 billion per year. He also asserts that only half of the fish that we eat are caught wild at sea, the rest being cultured in large cages or on land in dams/ponds. We know that Norway is a large producer of fish. Naturally, he also writes about the offshore oil industry and asserts that a third of all oil production, 24 million barrels per day, is produced offshore (NGL is excluded). At a price of $100 per barrel that is oil worth $860 billion, nearly five times as much as all sea traffic. 17,000 fixed or floating oil production platforms have been built and 400 new platforms are built every year if one includes those installations built directly on the sea floor. With this in mind it is amazing that there are not further accidents at sea. It is estimated that investments in offshore oil production increased by $213 billion in the last year, i.e.

(To Swedish text)

Comments on the comments made following the “Focus” article (Brännpunkt) in Svenska Dagbladet: “The EU must drastically reduce its oil imports”.

”Focus” gave its readers the opportunity to comment on my article published recently there. As one engaged in the peak oil debate I should respond to them. There are those who assert that such commentators not worth bothering about but the fact remains that those who have left comments have probably read the article and that has given them cause to write. Focus limits comments to three per person and that means that I did not have the opportunity to enter a discussion at their website and respond to all the viewpoints that the various readers had contributed. I have now studied the 141 comments that have been made as I write this and they can be crudely divided into four topics: Peak Oil, the climate, atomic energy and conspiracy theories.

Kjell Aleklett, Professor in Global Energy Systems at Uppsala University, Sweden.

The Swedish newspaper Svenska Dagbladet has now, 2012 December 23, published my article "EU must drastically reduce its oil imports". In Swedish, "EU måste skära ner sin oljeimport drastiskt". Michael Lardelli has made a great translation of the article and I have added some relevant photos and graphs. Every week you are around 1000 persons that read my blog and I which you all Merry Christmas and a happy new year.

EU must drastically reduce its oil imports

The term “Peak Oil” refers to that point in time when the rate at which oil is produced can no longer be increased and instead plateaus or begins to fall. Peak Oil does not mean that oil production is over but it does mean that the era of increases in the rate of oil production is over. During autumn I have been invited to give presentations on Peak Oil in China, Abu Dhabi, the EU, Canada and the USA.

By Kjell Aleklett

On Friday I boarded the aircraft in New York to travel back to Stockholm from (among other things) the ASPO-USA conference. When I did so I picked up two newspapers, The Wall Street Journal (WSJ) and the Financial Times (FT). The front page of the WSJ was headlined with the news, “U.S. Gas Exports Clear Hurdle" and on page 3 in FT one could read “US study on gas output backs exports”. (The Internet version of the article is titled, “Report gives green light to US gas exports")

If we focus on the WSJ article then we can examine the graph it shows of future production.

According to the graph, the USA will produce 33.1 trillion cubic feet of natural gas in 2040 compared to the 23 trillion cubic feet that was produced in 2011. At the recent ASPO-USA conference the Canadian geoscientist David Hughes presented his studies of shale gas production in the USA.

By Kjell Aleklett, President of ASPO International

For the past two years ASPO-USA has had its yearly conference in Washington close to centre of political power. This year as the political pot was stirred after the presidential election they chose to move the conference to Texas. With the cooperation of The University of Texas at Austin it was possible to move the conference into an academic environment as well as into the heartland of American oil production. The first international ASPO conference was also organized in an academic environment at Uppsala University in Sweden in 2002. This theme for this year’s ASPO-USA conference was “The Next Oil Crisis – is the boom just another bubble?”. In one week the presentations made at the conference will be available via the ASPO-USA website so I will not discuss all of them in detail. The presentations I have chosen to discuss below represent those that were of most interest to me personally.

On 12 November the IEA’s World Energy Outlook report for 2012 (WEO-2012) was presented by the chief economist of that organisation, Dr Fatih Birol. When he did so there was one idea that the journalists in the audience latched on to – that by 2020 the USA would become the world’s largest oil producer. The USA would even produce more oil than Saudi Arabia! The New York Times led with the news, “U.S. to Be World’s Top Oil Producer in 5 Years, Report Says” and in their article they wrote that, “The United States will overtake Saudi Arabia as the world’s leading oil producer by about 2017 and will become a net oil exporter by 2030, the International Energy Agency said Monday.” Of course, I wondered if these were Fatih Birol’s actual words.

On 23 November Dr Birol was invited to Stockholm by Sweden’s Minister for Energy Anna-Karin Hatt to present WEO-2012. Representatives from the diplomatic corps in Stockholm, from industry, from academia and others were invited to attend the presentation. An invitation even arrived in my mailbox.

On Friday November 23 Dr Fahti Birol presented World Energy Outlook 2012 in Stockholm and the presentation is recorded and available to see from the KTH Video Library. Go to :
http://www.kth.se/ece/stabsfunktioner/kth-medieproduktion/showroom/kth-live-1.318500

In the library you go to “Live Show [livestream] Fri". The presentation is 1:24 long and it starts after 10 minutes from the beginning. Dr Birols presentation starts after 18 minutes.

The presentation of the US data comes 31 minutes in to the presentation and I ask a question at the end, 01:21.

I will come back with comments.