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OPEC’s 165th meeting: ”Everybody is happy”

On 11 June OPEC held its 165th meeting in Vienna and the organisation’s 12 members decided to maintain its production volume of 30 millon barrels of oil per day (Mb/d). The meeting is reported in the OPEC Bulletin 6/14. They also decided to extend Abdalla Salem El-Badri’s term as general secretary of OPEC until the end of the year. After the meeting a press conference was held during which General Secretary El-Badri stated, “Right now we have a very comfortable crude oil price, the market is stable and OPEC is producing 30 Mb/d of crude, more or less. The consumers are getting their supplies and the producers a good price. Everybody is Happy.”

On the question of whether shale oil production in the USA was a threat to OPEC the answer was that it was not because the USA would not be an oil exporter. With regard to future investments El-Badri considered that OPEC had a good plan for investments and stated they would study the balance between demand and production. In conclusion he said that “OPEC will continue to play its part in supplying the world with enough crude oil”.

In the OPEC Bulletin some of the external guests to the meeting were also interviewed.

The EU’s and Russia’s mutual dependence

On 4 June I participated with Patrik Jotun, (a researcher and analyst at the Ministry for Foreign Affairs), in a symposium organised by the Green Liberals with the theme, “Environmental and Climate Policy in the Shadow of Developments in Russia – on environment, climate, security and energy supply”. The delegates were allowed into the Folk Party’s premises at Mynttorget under strict security control. My presentation was somewhat similar to that I gave at The Economist’s recent symposium in Stockholm and so I will direct you to my earlier blog on that event for details (European Energy Horizons 2014). I found Patrik Jotun’s presentation very interesting and it gave me new perspective on the tensions that we see today between the EU and Russia.

Clouds on the horizon for fracking companies?

The Oil & Gas Journal has published an article with the headline, "Chesapeake mulls spinoff, sale of oil field services division". The article is especially interesting since Chesapeake is one of the largest companies in fracking. On Chesapeake Energy Corporation’s website one can read that they are the second largest producer of natural gas and the eleventh largest company for production of oil and NGL in the USA. Further, one can read that, “The company’s operations are focused on discovering and developing its large and geographically diverse resource base of unconventional natural gas and oil assets onshore in the U.S. The company also owns substantial marketing, compression and oilfield services businesses.” On 11 February 2014 the company submitted an “Investor presentation” and they explained that they were required to make such “forward-looking statements” by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

NOG Symposium: World Energy Outlook 2013 - Energy Markets Changing

Image: Bo Diczfalusy

On February 6 the Network for Oil and Gas (NOG) in Sweden organised a symposium at which the World Energy Outlook 2013 report was discussed, primarily in terms of a changing energy market. Personally, I was interested in what Bo Diczfalusy, ‎Director at the Swedish Ministry of Enterprise and Energy, would say about WEO 2013. From December 2009 until December 2012 he was Director of the Directorate of Sustainable Energy Policy and Technology at the International Energy Agency (IEA). That means that he is well acquainted with the production of WEO reports. His presentation on WEO 2013 did not differ significantly from that given by the IEA’s Chief Economist Fatih Birol last autumn. Possibly he pointed out even more clearly that the WEO report is a scenario calculation restricted by certain assumptions.

Elin Akinci from the Energy Authority gave a more detailed description of the natural gas scenario that exists in WEO 2013.

Theme issue on peak oil


Philosophical Transactions of the Royal Society has the prestige of being the world’s first scientific journal and also published the work of Charles Darwin, Michael Faraday, William Herschel and many more celebrated names in science. Recently, this journal published a theme issue, edited by Richard G. Miller and Steve R. Sorell, on peak oil. This volume presents the best scientific evidence on why a decline in oil supply may, or may not, be in sight. It considers the production and resources of conventional oil and the potential for developing alternative liquid fuels from tar sands, shales, biomass, coal and gas. It describes how economies might react and adapt to rising oil prices and how the transport sector could be transformed. It provides comprehensive and interdisciplinary perspective on the ‘peak oil’ debate and reflects a range of views. Ultimately, it reminds us that the wolf did eventually appear - and that it would be wise to prepare.

Find the full theme isse here:
http://rsta.royalsocietypublishing.org/site/2014/2006.xhtml

Nobel dialogue in Gothenburg on 9 December - comments

For the second time a dialogue has been organised during the Nobel Prize week and this time it was in Gothenburg. The idea of the event is that one should take advantage of the unique opportunity that a number of Nobel Prize winners, other leading researchers, leaders of industry and politicians are gathered in Sweden for the Nobel Prize festivities. The theme for the dialogue this year was the future of energy and I felt honoured to be invited to participate. It was especially enjoyable for me to be in Gothenburg since this is the city in which I was born and studies. However, the reason for my invitation was my research on global energy systems.

02a Nobel dialog David MacKay

The invitees began the day with a joint breakfast. For the breakfast the organisers had invited David MacKay as speaker.

Now the world needs new energy systems

On December 9th, the day before the Nobel Prizes are handled out in Stockholm, there is a "Nobel Week Dialogue" in Gothenburg. This year's theme is "Exploring the Future of Energy" and participating Nobel Laureates are presented by the organizers. My contribution to the dialogue is now published by Svenska Dagbladet on “Brännpunkt” under the heading "Now we need new energy systems" (Read the article in Swedish on Brännpunkt).

A field trip to East Texas Oilfield, November 2013

By Kjell Aleklett

Jean_Laherrère_East_Texas
Yearly production of oil in East Texas Oilfield in relation to the cumulative production.

The largest oilfield in the USA south of Canada is said to be the East Texas Oilfield. (The largest oilfield in the USA is Prudho Bay in Alaska).Since I began my research on oil in 2003 my mental image of the East Texas Oilfield has been the graph of production from that field that Jean Laherrère used to present and update every year. The latest version is updated for 2012. We see that production reached a maximum in 1933 and then declined until the 1960s when they began to pump water into the field to raise its pressure. Production then increased for some years before beginning to decline once again. Since the middle of the 1990s production has crashed.

The IEA raises a little warning flag on future oil production - World Energy Outlook 2013

By Kjell Aleklett
Uppsala University
Department of Geosciences and
Visiting professor at University of Texas at Austin
Department of Petroleum and Geosystems Engineering

On 12 November the International Energy Agency (IEA) released this year’s edition of their World Energy Outlook report, WEO-2013. I have not studied all the detail in the report but I listened to the presentation that the IEA’s chief economist, Dr Fatih Birol, gave in London. During the past 10 years I have studied and analysed the World Energy Outlook reports. One of the first detailed analyses that I did was in 2004 regarding WEO-2004. At that time the IEA thought that oil demand in 2030 would be 121 million barrels per day (Mb/d). The conclusion I drew from my analysis was that their prognosis was unrealistic. (http://www.peakoil.net/uhdsg/weo2004/AnalysisWorldEnergyOutlook2004.pdf)

Last year the IEA focused on shale oil in the USA as their main story and the news spread around the world that the USA would overtake Saudi Arabia as the world’s leading oil producer.

Goldman Sachs - "360 projects to change the world"

Rubrik

The fact that they have now begun to produce oil from Kashagan and that we know the project costs are $48 billion gives me reason to look at a report that Goldman Sachs presented in March 2012, ”360 projects to change the world”. They have studied how much oil and gas the various projects are planned to deliver and the very interesting information on what oil price is needed for the projects to be profitable. The fact that all new projects need financiers means that new projects are well documented. This also makes it possible to do this analysis. The analysis can be seen as one of optimal possible new future oil production.

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