Category Archives: Peak Oil

Everything related to oil depletion a.k.a. Peak Oil

Media should promote renewable energy: IREDA

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According to Yahoo!News

New Delhi, June 1 (PTI) A government organisation dedicated to development of renewable energy today appealed the media to play a more meaningful role in promoting alternative source of energy.

“Today, our power sector is struggling and there is an urgent need to find an alternative source of energy. Renewable Energy can bridge this gap but it is unfortunate that it finds a very negligible coverage in the media. We need your (media) support,” IREDA chairman and managing director Debashish Majumdar said at ”Media Roundtable On Renewable Energy” conference here.

The only way I can think of to help the media understanding on renewable energy cost are to cut them off from electricity produced by fossil fuel for a day, that way they will finally understand the importance of renewable energy and the consequences of not focusing on it.

Fossil fuel is not forever available even thou there are many who promises that by saying there are many “alternative” to oil like Oil shale which are abundant in some countries however it’s more costly to extract oil from it than oil & natural gas because it’s from sediments (ROCKS).

Once oil sprayed out in high pressure from new oil wells like a geyser without any assistance or “cost” but once it’s being extracted, the pressure lowered & the oil industry need to pump huge amount of fresh water into the oil wells to “make the oil float” out of the oil wells.

Then the oil to water ratio decreases over time  until we have to abandon the wells that in the 1950′s are claimed to be “FOREVER LASTING”.

After that the heavy oil in soil call bitumen or Tar Sands are quoted to be the NEXT big thing in Canada because the cost of oil is so high and digging into tar sands seems to be cost effective.

Now, we are talking about oil shale…basically rocks instead of tar sands.

Nuclear had been proven again & again to be just a “time bomb” waiting to explode and many countries are unable to build it due to this reason.

So, the media industry need to understand that in the future…fossil fuel will no longer be the dominant energy that they can consume freely & cheaply.

Renewable energy is the only way out and people will need to know all this quickly or there will be a day when human will fight each other to the death just for the last barrel of fossil fuel.

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Oil Above $100/barrel “again”

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According to Bloomberg:

Oil surged to $100 a barrel in New York for the first time in two years as Libya’s violent uprising threatened to disrupt exports from Africa’s third-biggest supplier and spread to other Middle East oil producers.

According to rte.ie

The price of Brent crude oil jumped more than $8 a barrel in London this morning as fears spread that unrest across North Africa and the Middle East could further disrupt oil supplies.

This morning the price of Brent hit a high of $119.79 a barrel, up $8.54 from yesterday’s close.

Here we have history unfolding right in front of our eyes, just like an fictional book about the coming depression of the world where oil prices goes sky high but my feelings is this will depress the world economy so much due to hyperinflation and cause a sudden drop in “demand” of oil itself.

This is because renewable energy or other alternative energy will suddenly become very viable due to the cost comparison with oil price and demand of oil will drop eventually, however this change won’t happen overnight as there are still millions or billions of vehicles that uses oil, petrol chemical products are everywhere including plastic, gasoline, paint and thousands of stuffs, food also uses plenty of oil before reaching our dinner table.

Ultimately, once the middle east unrest are settled down either with another war (oil grab) or otherwise, the price of oil may fluctuate wildly.

Saudi’s oil is not of the highest quality (usually high sulfur which is deadly) and hence cannot 100% cover the loss in Libya’s oil field.

Tonight’s market will go crazy with the news happening now and it will be very very risky to trade now as you won’t know the next movement will be.

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Demand for biofuels expected to rise 20%-30% annually

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According to ChannelNewsAsia:

SINGAPORE : This week, the European parliament voted for new rules that require lower emissions from commercial vehicles.

With governments globally continuing to set stiff targets for the use of “clean” energy, Biofuels Asia – a Singapore-based clean-energy company – is betting on Jatropha, a hardy plant that is a source of biodiesel.

Biofuels may be alternative fuel but by no means very “clean”, however it’s much “renewable” then fossil fuel.

What I mean it’s not clean because of the following.

  1. Fertilizers (Natural gas)
  2. Pesticides (Oil)
  3. Huge Mechanized Harvesters/seeders/plough (Oil)
  4. Water pumps for irrigation (electricity – probably by oil powered generator)

After all the fossil fuel being consumed to get the biofuels, the high cost may means if one day the oil price collapsed again after some kind of major economic crisis (maybe due to high oil prices -> hyper inflation -> banking & subprime or other kinds of crisis) MAY also means that the biofuel may be NET Loss in “cost” & “energy”.

EROEI – Energy Return over Energy Invested must be higher then fossil fuel to get a net gain, if the world blindly goes “green” just because of the carbon tax reduction it will not be a long term solution but a rather short term one.

Personally I still believe in true “renewable” energy from the Sun, Wind, Hydro, geothermal, wave, and other harvest-able natural energy from the environment.

However, due to unstable environmental circumstances in different countries may means some renewable energy cannot be “cost” effective to be utilized.

Nuclear is one way to go for some countries but it may pose risk of major disaster issues but it’s a medium term solution until a new & better way to harvest the natural energy “efficiently” & less cost intensive to maintain the system.

Biofuels is at best a temporary solution but it’s better then no solution so the best system may be a balance of all solutions to make up a way to counter the PEAK OIL crisis that may had already started.

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An inconvenient truth about OPEC

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The three major organisations that forecast long-term oil demand and supply – the International Energy Agency (IEA), the Organisation of Petroleum Exporting Countries (OPEC), and the United States Energy Information Administration (EIA) – along with oil companies and consulting firms, believe that OPEC will reconcile predicted global demand and non-OPEC supply.

Click to continue reading “An inconvenient truth about OPEC”

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Oil up above $77 on US Crude pipeline leak

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Oil prices jumped above $77 a barrel Monday, extending gains for a second trading day after a leak forced the closure of a Chicago-area oil pipeline and disrupted supplies to U.S. Midwest refineries.

By early afternoon in Europe, benchmark crude for October delivery was up 72 cents to $77.17 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $2.20 to settle at $76.45 on Friday.

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Oil rises to over $76 on U.S. supply outage

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According to Yahoo News:

NEW YORK (Reuters) – U.S. crude rose more than 2 percent to $76 a barrel on Friday following the shutdown of a major pipeline supplying Canadian oil to the United States, but a leading forecaster said world demand would remain tepid.

The U.S. crude contract for delivery in October rose to a peak of $76.56 a barrel, the highest level since mid-August, after Enbridge Inc(ENB.TO) said pipeline 6A remained shut as the cleanup of an oil leak continued near Romeoville, Illinois.

Let’s see the chart at 10 min interval with 500 units per interval

The supply outage from pipeline 6A may contributed to the spike of NYMEX Crude OIL price, I do hope that the oil price don’t go up further but the repairs of the oil leak may take time to repair.

Anyone who have the timely information on how long can this repair take may catch the oil price at it’s peak and make a killing in the market however if any geopolitical event happens concurrently…the oil price spike may again become a tsunami.

September 11 is a crucial time for geopolitical events and hopefully nothing serious will happen in the middle east.

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Leaked German report argues peak oil is happening now

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A leaked report prepared for the German government has warned that global oil supplies could peak as early as this year, triggering widespread market failures and a shift in the balance of world power.

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Peak Oil & Me

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I believe peak oil had passed & we are at the state where the world is trying to remedy the demand & find alternative supply of fuel or energy.

How in the world can we survive peak oil if every joule of food we eat especially meat need at least 5 joule of fossil fuel to bring to our plates.

Click to continue reading “Peak Oil & Me”

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Saudia Arabia: $200 Oil In 2 Years

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According to CNNMoney.com:

Saudi Arabia warned oil prices could spike to beyond the near $150 record high of 2008 within two to three years, as energy leaders on Monday decried a blow to investment in expanding capacity due to the financial crisis.

Yes, this is a serious threat that I had been echoing for some time now. The lack of investment due to the current financial crisis may cause a serious oil shortage in the near future causing sudden spike much higher than the one we had experienced before.

Russia did mentioned it before last time when they declined to reduce their oil supply specifically predicting a future oil shortage if you can remember it.

This can be the REAL oil crisis that really have more demand then supply causing the market to correct the difference in terms of cost. That means a much higher oil prices in the future may be possible unless there is the following to happen…

  1. World population reduced by war, epidemic, disaster and birth controls.
  2. Economic Crisis to crash one more time…this time severely causing mass die off due to revelation that money is not that valuable after all…it’s a piece of paper easily replaced by the government at a single press release.
  3. Global electronics suddenly malfunction due to a natural solar storm or EMP attack using high altitude nuclear explosion, this will cause at least half of the world population to go back to stone age hence using less oil.
  4. Mass suicides?
  5. Cannibalism becomes popular!?? Ahhh!

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Oil hovers above $58 on signs recession easing

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According to Yahoo!News:

SINGAPORE – Oil prices hovered above $58 a barrel Tuesday in Asia on growing investor optimism that the worst U.S. recession since World War II may have bottomed.

Benchmark crude for June delivery was down 23 cents to $58.27 a barrel midday in Singapore, in electronic trading on the New York Mercantile Exchange. On Monday, the contract fell 13 cents to settle at $58.50.

Oil prices have jumped from below $35 a barrel in February amid signs the pace of economic deterioration has slowed, setting the scene for an eventual recovery.

“The feeling is we’ve seen the worst of it, and the only way now is up,” said Gerard Rigby, an energy analyst with Fuel First Consulting in Sydney. “Some of this is also a trading momentum play.”

It’s kind of weird seeing oil prices tied to employment figures, first quarter earning figures and general economy outlook instead of pure demand and supply. The general feel I get from articles such as above is that they are seeking REASONS why oil price had increased the past 2 weeks and identify the culprit.

They had constantly mentioning that there are NO increase in crude demand & there are no pressure on supply side and that is true if you are talking about NOW but if you are talking about future crude demand & supply…it will be another story.

The delicate balance now is for the world to accept the fact that we cannot afford to use oil wastefully anymore even when the economy returns back to “better days”, we will face hyperinflation easily by the up swing of oil prices or down swing of US dollars.

Oil Prices
With H1N1 infection still continue to spread across the globe regardless if it’s lethal or not…it may eventually slice off few hundred thousands weak and old people with underlying medical conditions such as a bad lung, heart or other related diseases.

Demand might balance it self with some miracle and normalize the price of oil for a period of time but with more people now investing & speculating on crude oil…it will go ANYWHERE from a super spike one day and a major correction the next and all these happens regardless of actual physical demand.

I am happy that the signs of recession may be easing off slightly and the only way to stay alive is to keep that positive thinking & prepare for contingencies.

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