Crude Oil Production–Going, Going, Gone

November/23/2008 2:00AM
1 interesting comment, join the discussion
Please follow and like us:

New forecasts just came out for crude oil production in 2009. The International Energy Agency, which does this kind of thing, says production will be down more than last year’s forecast for 2009. This organization, based in Paris, does oil forecasting for oil producing countries. They make predictions from a study of 800 of the world’s oil fields. Last year they said the world would need to invest $22.3 trillion by 2030 to ensure adequate oil supplies. This year they added $4 trillion to that total. They put demand growth at a modest 1.5% a year average. That puts demand at 106 million barrels a day in 2030 vs. 85 million a day this year.

Fields are drying up faster than everyone thought. They looked at the 20 largest fields in the world at their peak year and compared that to 2007. In aggregate these fields produced 30 million barrels a day at each field’s peak. In 2007 those fields produced 19 million barrels a day.

In the U.S. where we import 70% of our crude oil, this is particularly bad news. Big oil, or Exxon-Mobil, Royal Dutch Shell, and BP are shut out from most new fields under development since the fields are owned and controlled by nations that intend to develop them with national oil companies. 

We can and have cut our demand. How much we can cut will be determined by our economy. Can our economy recover if we have to raise demand and that brings back the $120 crude. The answer to that is above my pay grade. 

America seems destined to sit this one out. We are going to bet the farm on alternative energy. If it doesn’t happen, the farm may be fallow. I don’t find this a very logical way to risk my grand kid’s futures. Seems like putting way too many eggs in the hope catagory. The recent $700 billion in TARP bailout would have built 70 new nuclear power plants here. It would have funded the pipeline from Alaska to bring the natural gas to the lower forty eight. It would have funded all of our future energy supply requirements for the next 20 years and made us energy independent. 

Guess the banks were more important. President Obama plans to spend $150 million on alternative energy. That will money he extorts from the oil industry which may move out of the U.S. and take their taxes and jobs with them. We will still have the banks, or will we ? If we have no energy or have to pay more than the $600 billion we paid this year to foreign countries, we might not have any money to put in those banks.

Please follow and like us:

Other Articles You Might Enjoy:

  • No Related Posts

Comment (1)

  1. Exact title you have chosen for the topic. I think it is less confusing to have different contract quotes for the distillates of crude oil and the crude oil itself. But this has become an interesting future for the investors.

Leave a Reply