What is Peak oil?
"The term Peak Oil refers to the maximum rate of the production of oil in any area under consideration, recognising that it is a finite natural resource, subject to depletion."
Submitted by Kjell Aleklett on Wed, 2016-01-20 12:22.
In March 1999 the cover of The Economist carried the bold headline "Drowning in Oil". In December 1998 the price of Brent crude oil had dipped below $10 per barrel to then lie just over that mark. By October 2003 the situation in the oil market had changed and the Economist now carried the headline "The End of the Oil Age". At that time the price fluctuated around $30 per barrel which was an increase of 200 %. Low prices are usually an indicator of excess supply and high prices are the opposite.
Since it has the world's largest reserves of oil, Saudi Arabia has been the main player in the oil market since the 1960s. The figure above shows that nation's oil production. As a reaction to the war in Israel, Saudi Arabia closed down production from a number of its oil wells at the beginning of the 1980s.
Submitted by Kjell Aleklett on Tue, 2016-01-19 13:53.
On New Year’s Eve the players in the fracking industry popped their champagne corks but it was not to celebrate wonderful success as they had done the year before. Rather it was to drown their sorrows. The USA’s Energy Information Administration (EIA) has now released this year’s first Drilling Productivity Report so we can now summarise what happened with fracking for shale oil and shale gas during 2015.
One the map you can see the areas in the USA that accounted for 92 % of the increase in oil production and 100 % of the increase in natural gas production during 2011-2014. These are the areas included in the Drilling Productivity Report .
Submitted by Kjell Aleklett on Fri, 2016-01-15 22:33.
Dear friends of ASPO
We have had some problem with our website and the problem is that the construction of the site is too old. ASPO needs to construct a new site.
The next problem is that we need financial support to run the site and also for making a new site.
With a new site I hope we can be very active again.
If anyone can help with support in one way or another please send an e-mail to:
Submitted by Kjell Aleklett on Thu, 2015-05-28 14:29.
Since 2007 when we published our article, ”A crash program scenario for the Canadian oil sands industry” a visit to Fort McMurray and the areas where oil sands are mined has always been high on my wish list. On my current trip I passed Calgary on the way to Toronto so I finally got an opportunity to visit the oil sands. The flight from Calgary became an interesting introduction to the industry. It was on a small aircraft with around 50 seats and about 40 of the passengers were presumably workers on their way back to Fort McMurray after a week’s leave. A three week session of work on the tar sands awaited them. This report is a description of my trip and does not take a position for or against the mining of oil sands.
During the weekends from May until and including autumn the Oil Sands Community Alliance (OSCA) in Fort McMurray organizes round trips to interesting places. I was able to put together my own trip with their help.
Submitted by Kjell Aleklett on Fri, 2015-04-10 14:54.
In June 2014 BP presented its latest Statistical Review of World Energy. Now, in March, they have used these statistics to make estimates of future energy use. The results were presented in BP Energy Outlook 2035. This year, BP has made a special analysis of North America, i.e. Canada, the USA and Mexico. But before BP presented their predictions they made a disclaimer. The question is what value BP’s future scenarios have in the light of the disclaimer. Does BP really believe its scenarios describe our future? In any case we will certainly see references to their scenarios in the media. I suggested that you download a suitable version and study it. (Download).
Submitted by Kjell Aleklett on Sun, 2015-03-22 16:11.
Since last autumn there has been overproduction of oil in the USA compared to what the market, OPEC and Saudi Arabia had planned. I have previously discussed how there is insufficient storage for this excess oil. It is fairly easy for the producers in the Middle East to close the taps and reduce production but closing the “fracking tap” is a completely different story. Bloomberg has published an article describing how, at the moment, the fracking tap is being closed in the USA, “Watch Four Years of Oil Drilling Collapse in Seconds”.
“The crash in oil prices kicked off intense debate over when, and how, American producers would react. So far they’re still cranking out oil, but there are signs that a slowdown is looming.
Submitted by Mikael Höök on Mon, 2015-02-16 10:59.
Discoveries of new oil and gas reserves dropped to their lowest level in at least two decades last year, pointing to tighter world supplies as energy demand increases in the future. Preliminary figures suggest the volume of oil and gas found last year, excluding shale and other reserves onshore in North America, was the lowest since at least 1995, according to previously unpublished data from IHS, the research company. Depending on later revisions, 2014 may turn out to have been the worst year for finding oil and gas since 1952...
The crash in the price of oil may change the oil market – a look at the IEA’s “Oil Medium-Term Market Report 2015”Submitted by Kjell Aleklett on Sun, 2015-02-15 10:29.
On Tuesday 10 February at 13:00 GMT the IEA released its “Oil Medium-Term Market Report 2015”. The day before the release I was contacted by Jens Ergon at Sveriges Television (“Sweden’s Television, SVT) who wanted to get my opinion on the report. I had a number of hours to read through the 140 pages of the version provided to media prior to the report’s official release. This meant that I could comment on the report immediately it was released. SVT has now reported some of those comments in an article that Jens Ergon has written, “The Price Crash Will Reshape The Oil Market”. The subtitle is, “American oil boom behind the falling price. But opinions vary widely on the future of oil.”
Let’s now go through the article together and I will make a few comments as we do so.
“The comprehensive fall in the price of oil has taken the world’s experts by surprise. Since the summer of 2014 the price of oil has more than halved from over $100 per barrel to a price today of around $50. Last Tuesday the International Energy Agency, IEA, made its first report since the price fall.
Submitted by Mikael Höök on Fri, 2015-02-06 19:11.
Big oil companies had a poor record of finding and producing oil and gas last year, according to figures out in the past week - and big cuts in spending in response to falling crude prices could undermine their plans to turn that around. Four of the world's six biggest oil firms by market value - Royal Dutch Shell, Chevron, BP and ConocoPhillips - released provisional figures showing together they replaced only two-thirds of the hydrocarbons they extracted in 2014 with new reserves. Combined, those four and industry leader Exxon Mobil posted an average drop in oil and gas production of 3.25 percent last year.
All predict their output will increase and new reserves will be added in coming years. But the 2014 results echo longer-term trends. Over the past decade, the biggest Western oil companies have seen reserves growth stall, production drop 15 percent and profits fall by almost a fifth - even as oil prices almost doubled, a Reuters analysis of corporate filings shows.
Read the full article here:
Submitted by Kjell Aleklett on Wed, 2015-02-04 15:46.
If one studies the price of oil between 1980 and the present day one can see that the price was lowest on 10 December 1998 at $9.10 per barrel. During the period 1990 to 2014 the average rate of inflation in the USA has been 2.59%. At that rate of inflation a price of $9.10 equates to $13.70 per barrel today. It was in 1998 that Colin Campbell and Jean H. Laherrère published their famous article, “THE END OF CHEAP OIL” in Scientific American. Today’s “low” crude oil price of around $50 per barrel is more than 250% higher than the equivalent price in 1998. The price of half a year ago of $100 per barrel would be over 600% higher than the 1998 price. Is there any better evidence that the cheap oil is gone and we will never see such cheap oil again?
Those who follow the oil story know that in 1956 M. King Hubbert said that the USA’s conventional oil production would reach a maximum between 1965 and 1970. Hubbert was ridiculed for his estimate and in 1970 his opponents happily declared that “we have never produced more oil than we are doing today”. The fact is that, at the peak, more oil is produced than ever previously.